Architectures, systems and methods having segregated secure and public functions

ABSTRACT

A system is provided for control of an entertainment state system having segregated secure functions and public functions for use by one or more users of the system. First, a public interface portal receives instructions regarding operation of the entertainment state system from the one or more users. The interface portal includes a first interface, a processor, a graphical user interface (GUI) coupled to the processor, a control unit in operative communication with the processor and graphical user interface, and a second interface providing an application program interface (API). Secondly, a secure entity unit is provided, the secure entity unit including a receive interface, the receive interface adapted to receive a call from the application program interface (API) of the interface portal, a send interface, the send interface adapted to provide a response to the interface portal interface, a game engine, and a financial engine.

PRIORITY CLAIM

This is a continuation of application Ser. No. 16/052,470, filed Aug. 1,2018, now issued as U.S. Pat. No. 10,489,709 on Nov. 26, 2019, which isa continuation of application Ser. No. 15/886,432, filed Feb. 1, 2018,which claims benefit of provisional Application No. 62/454,423, filedFeb. 3, 2017, which are incorporated herein by reference as if fully setforth herein.

FIELD OF THE INVENTION

The present inventions relate to architectures, systems and methods forprogrammatically controlled entertainment state systems. Moreparticularly, architectures, systems and methods for program controlutilizing cognitive computing, including but not limited to artificialintelligence and machine learning, and optionally including analytics.Systems, methods and architectures are provided for game andentertainment operations are provided utilizing decentralized systems,including blockchain, optionally in peer to peer systems. Moreparticularly, systems and methods for implementing a lottery, game orentertainment utilizing cryptocurrency, such as bitcoin, in adecentralized system.

BACKGROUND OF THE INVENTION

History shows that many trusted systems have evolved in order to providefor efficient functioning of society and business. Generally, these haveinvolved central control of systems in order to ensure compliance withrules. Within the gaming space, examples include lotteries and regulatedgaming. By way of example, the Nevada Gaming Control Board monitorsinstitutions within the state for compliance with laws and regulations,and ensures the fair and efficient functioning of the industry.

Consider the entertainment and gaming system background. A lottery is a‘State’ Function and serves as a form of ‘trusted agent’. The classicdefinition of the elements of a lottery are prize, chance andconsideration. When these elements are reordered into a morechronologically correct order, namely first, receipt and holding of theconsideration (e.g., ticket purchases), chance (e.g., ensuring a fairand accurate random number generator) and prize (i.e., paying the prizeto the true winner.) Therefore, the State acts as a ‘trusted agent’ asit holds the consideration, guarantees randomness of the ‘chance’, andpays out the prize (title transfer). ‘Trust’ is based on the Integrityand Trustworthiness of People Operating the System and the RegulatorsWho Oversee the System. Lotteries or State Regulators are often formerlaw enforcement. The degree of trust in the Regulators is often based ontime and track record, e.g., the State of Nevada Regulatory system isconsidered highly trustworthy and effective, based in part on amulti-decade long track record. Additionally, a State with the mostbusiness to lose from a loss of trust in the regulatory process is mostmotivated to provide regulation. Such systems are based on centralcontrol of the system.

A casino is a ‘state regulated’ function and a form of ‘trusted agent’with ‘verification’. They are licensed by the State and subject to stateinspection.

Various advancements have been made in the gaming and entertainmentenvironment. The following are assigned to the assignee of this, and arehereby incorporated by Reference as if fully set forth herein: Games,And Methods For Improved Game Play In Games Of Chance And Games OfSkill, U.S. Pat. No. 6,565,084, Games, and Methods and Apparatus forGame Play in Games of Chance, U.S. Pat. No. 6,488,280, Games, andMethods and Apparatus for Game Play in Games of Chance, U.S. Pat. No.6,811,484, Apparatus and Method for Game Play in an ElectronicEnvironment, U.S. Pat. No. 8,393,946, Apparatus, Systems and Methods forImplementing Enhanced Gaming and Prizing Parameters in an ElectronicEnvironment, U.S. Pat. No. 7,798,896, Apparatus, Systems and Methods forImplementing Enhanced Gaming and Prizing Parameters in an ElectronicEnvironment, U.S. Pat. No. 8,241,110, Methods and Apparatus for EnhancedPlay in Lottery and Gaming Environments, U.S. Pat. No. 8,727,853,Methods and Apparatus for Enhanced Interactive Game Play in Lottery andGaming Environments, U.S. Pat. No. 8,241,100, Method and System forElectronic Interaction In A Multi-Player Gaming System, U.S. Pat. No.8,535,134. Generally, they comprise a suite of tools to make systemsmore engaging, and to optimize results.

One vexing problem in larger systems results from systemsincompatibility. Various components often come from various vendors.There is often a lack of interoperability and incompatibility. Varioussystems in the gaming ecosystem need to interoperate, including but notlimited to: gaming operations, marketing, CRM (Customer RelationshipManagement), loyalty programs, Ancillary Points or Credits, SystemAnalytics and Optimization, and account and audit functions.

Software Defined Systems are a collection of modules interoperated undera higher level of software control. These manage network servicesthrough abstraction of lower level functionality. Generally, there is anApplication Plane, a Control Plane and a Data Plane. Examples includeSoftware Defined Networks having a Control Plane which providesintelligent control of data plane composed of relatively lessintelligent switches, routers, storage. Yet another example is softwaredefined radio. The control plane monitors and supervises use offrequency bands in the data plane.

Yet another component is the use of static interfaces and tools. Forexample, APIs or Application Programming Interfaces generally comprise astatic interface. They define a format for an information request. ‘Ifyou ask for X in a specific way, we will provide Y’. Generally, noaccess is provided by requestor to the system other than via API. Yetanother system are SDKs or Software Development Kit. They may be static.Tools are provided to achieve desired results. GDKs or Game DevelopmentKit also may be static and provide tools for game development.

The design of entertainment or games is often driven by metrics drivendesign. This often involves A/B Testing comparing the results orfavorability as between multiple systems. Further, they often monitormultivariate response systems.

One aspect of lotteries and Lotto style games is that they tend to bestatic. At the most extreme example, they are literally printed oncardstock. More generally, once a format for a lottery game has beenchosen, such as a 6 out of 49 format, it is difficult to change. Publicperception of change is that the game has become less favorable to theplayer.

Problem gambling issues have plagued the gaming industry. It is asignificant issue for society. While users can solicit help (e.g.,1-800-Gambling), there is often denial and an unwillingness to seekhelp. Various attempts have been made to limit abuse, such as use ratelimits in some on-line games.

In the move from bricks and mortar to on-line and cyber spheres,identity issues proliferate. Issues include: are you who you purport tobe and will the user's identity be compromised?

Significant advances have been made in cognitive intelligence andadaptive intelligence. For example, IBM Watson won a Jeopardycompetition 2011 against highly skilled players. Deep learning andpattern recognition has occurred. Current trends include big data,pattern recognition and machine learning.

Recent advances have also been made in object detection, both in 2D and3D space. A challenge in the Large Scale Visual Recognition Challenge(LSVRC) provides for Object Detection in ImageNet 2016. The error rateof automatic labeling of ImageNet declined to less than 3%, compared tohuman performance of about 5%.

Significant advances have also been made in machine based game playperformance. In 2015, Google DeepMind used an artificial intelligencereinforcement learning system to learn how to play 49 Atari games. In2016, AlphaGo system from Google DeepMind beat one of the world'sgreatest Go players 4-1. In 2017, Carnegie Mellon University's Libratusprogram defeated top human players in a statistically significantmanner.

Further advances have been made in cloud based systems. Functions havebeen migrating from local servers and storage to remote ‘cloud’ storage.These systems provide for easy scalability. Clouds based systems may runmultiple ‘instances’ simultaneously. They also may combine software as aservice, including Artificial Intelligence (“AI”).

The Internet of Things (“IoT”) utilizes devices capable of sending datato remote location, and receiving command data. Various voice controlleddevices use AI or machine learning (“ML”), e.g., Amazon Alexa, GoogleDot.

FIG. 1 shows an exemplary prior art centralized system. FIG. 2 shows anexemplary prior art distributed system.

Advancements have been made in trusted distributed systems such as inthe use of blockchain based systems. The initial disclosure of theblockchain technology is attributed to Satoshi Nakamoto in a paperpublished October, 2008. This system provides for automatic trust orsystem trust. The blockchain paradigm provides for a decentralizedsystem utilizing decentralized consensus. This can be done in apeer-to-peer manner without an intermediary. The system may be viewed asa network of nodes running software on a programmable distributednetwork. It is sometimes referred to as a transaction singleton machinewith shared state, a transaction based state machine, a message passingframework, a trustful object messaging compute framework and trustedcomputing.

A decentralized consensus is established by a combination of blockchainand cryptography. Authority and trust is provided by the decentralizedvirtual network. Consensus logic is generally separate from theapplication. It may comprise the first layer of a decentralizedarchitecture.

Blockchain utilizes a distributed ledger. A ‘block’ comprises a newgroup of accepted transactions. A batch of transactions is released in ablock to be validated by the network of participating computers.Continuous, sequential transaction record on a public block creates aunique “chain” or blockchain. This block is published to all othernodes. The publication occurs periodically, e.g. every 10 minutes.

Etherium is an open source platform for smart contracts. As currentlyoperated, Etherium is a decentralized platform that runs smartcontracts: applications that run exactly as programmed without anypossibility of downtime, censorship, fraud or third party interference.The applications run on a custom built blockchain, an extremely powerfulshared global infrastructure that can move the value and representownership of the property. This allows developers to create markets,store debt or promise records, move funds according to long-standinginstructions (such as a will or a futures contract), without thecounterparty risk. Etherium also states that its goal is to create atradeable digital token that can be used as a currency, a representationof an asset, a virtual share, a proof of membership or anything at all.These tokens use a standard coin API, so the contract will beautomatically compatible with any wallet, other contract or exchangealso using this standard. The total amount of tokens in circulation canbe set to a simple fixed amount or fluctuate based on any programmedruleset. In summary, Etherium states that it enables building atradeable token with a fixed supply, a central bank that can issue moneyand a puzzle-based cryptocurrency.

There are many disadvantages to the current systems. They are slow tochange and innovate. They often involve proprietary systems that do notinteroperate. There is often governmental and or institutional bias.There may be a cumbersome regulatory environment. Finally, there areoften high transaction costs.

Thus, there is a need for interoperability among inconsistent, oftenproprietary systems. There is a need for gambling limitation on a moreglobal basis, including geo-limitation and global use rate monitoringfor problem gambling. There is a need for problem gambling detection andremediation. There is a need for improved distributed systems.

SUMMARY OF THE INVENTION

In one aspect, the inventions comprise a system for control of anentertainment state system having segregated secure functions and publicfunctions for use by one or more users of the system. First, a publicinterface portal receives instructions regarding operation of theentertainment state system from the one or more users. The interfaceportal includes a first interface to receive instructions from andcommunicate to the one or more end users, a processor, a graphical userinterface (GUI) coupled to the processor, a control unit in operativecommunication with the processor and graphical user interface, and asecond interface providing an application program interface (API).Secondly, a secure entity unit is provided, the secure entity unitincluding a receive interface, the receive interface adapted to receivea call from the application program interface (API) of the interfaceportal, a send interface, the send interface adapted to provide aresponse to the interface portal interface, a game engine, and afinancial engine. Preferably the financial engine is coupled to the gameengine, the receive interface and the send interface.

Systems and methods are provided for training an artificial intelligencesystem including the use of one or more human subject responses tostimuli as input to the artificial intelligence system. One or moredisplays are oriented toward the human subjects to present the stimulito the human subjects. One or more detectors serve to monitor thereaction of the human subjects to the stimuli, the detectors includingat least motion detectors, the detectors providing an output. Ananalysis system is coupled to receive the output of the detectors, theanalysis system providing an output corresponding to whether thereaction of the human subjects was positive or negative. A neuralnetwork utilizes the output of the analysis system to provide a positiveweighting for training of the neural network when the output of theanalysis system was positive, and a negative weighting for training ofthe neural network when the output of the analysis system was negative.

BRIEF DESCRIPTION OF THE DRAWINGS

FIG. 1 is a diagrammatic view of a prior art centralized system.

FIG. 2 is a diagrammatic view of a prior art centralized system.

FIG. 3 is a system level block diagram of the program definedentertainment state system (PD-ESS) showing the application plane, thecontrol plane and the state data plane.

FIG. 4 is a system level block diagram explosion of the applicationstate plane layer of the PD-ESS.

FIG. 5 is a system level block diagram explosion of the control planelayer of the PD-ESS.

FIG. 6 is a system level block diagram explosion of the state data planelayer of the PD-ESS.

FIG. 7 is a diagrammatic view of the ecosystem, including interfaces andinterconnections.

FIG. 8 is a system level block diagram of the neural network modelarchitecture including graphical processing units (GPUs).

FIG. 9 is a system level block diagram of the neural network modelarchitecture.

FIG. 10 is a system level diagram of multiple data sets including adifference engine and data analyzer.

FIG. 11 is response system display and detection system for generatinginput to train the artificial intelligence (AI) and machine learning(ML) systems.

FIG. 12 is a system level diagram of a dynamic system applicationprograming interface (d-API).

FIG. 13 is a system level diagram of a dynamic software development kit(d-SDK).

FIG. 14 is a system architecture level diagram of a distributed systemincluding blockchain and Etherium.

FIG. 15 is a system architecture level diagram of a permissionedblockchain system.

FIG. 16 is a system architecture level diagram of a blockchain platform.

FIG. 17 is a system architecture level diagram of a blockchain platformincluding open chain services.

FIG. 18 is a system architecture level diagram of a decentralizedcryptocurrency system with smart contracts.

FIG. 19 is a system architecture level diagram of a decentralized systemwith sequential hash value creation.

FIG. 20 is a flowchart diagram of a cryptocurrency lottery.

FIG. 21 is a flowchart diagram of a smart contract.

FIG. 22 is a flowchart diagram of a smart-smart (smart²) contract.

FIG. 23 is a flowchart diagram of a smart contract having mandated andvariable parameters.

FIG. 24 is a graphical user interface (GUI) of a cryptocurrency wallet.

FIG. 25 is a system architecture level schematic diagram of a systemhaving segregated public and secure functions.

FIG. 26 is a system architecture level of an interface of segregatedpublic and secure functions.

FIG. 27 is a system architecture level of a network implementation of asystem having segregated public and secure functions.

FIG. 28 is a system architecture level of a combined centralized anddecentralized system.

FIG. 29 is a system architecture level of a hierarchical system.

FIG. 30 is a plan view of a lottery linked credit card.

DETAILED DESCRIPTION OF THE INVENTION Architectures, Systems and Methodsfor Program Defined Entertainment State Systems

The following description is primarily in connection with FIGS. 3, 4, 5and 6, but may apply to other figures as well. An architecture isprovided for a program defined entertainment state system. Thispreferably serves to decouple the system that controls the overallexperience from the underlying systems that define states. The firstplane, the application plane provides an interface, primarily for systemside users, e.g., developers, organizers of events, contests, lotteries.The second plane, the control plane, provides for intelligent control,especially cognitive computing, including artificial intelligence and/ormachine learning, including artificial intelligence where the systemlearns over time. This preferably provides an intelligent control layerabove modules. The third plane, the state data plane, provides forentertainment ‘state modules’ with various mechanics, preferablyincluding ‘core loop’, meta states and provides interfaces for endusers, as well as inputs and outputs.

FIG. 3 provides a block Diagram Program Defined Entertainment StateSystem (PD-ESS). FIG. 4 is an Explosion of PD-ESS Application PlaneLayer, including an application layer GUI (facing the Developers,Affiliates, and Charities). FIG. 5 provides an Explosion PD-ESScontroller plane layer. FIG. 6 provides an explosion PD-ESS state dataplane layer. Also included are an explosion of entertainment statenetwork element layer, a user interface GUI, an explosion of value/titletransfer network element and explosion of other functional blocks.

Turning first to the Application Plane Layer, a program serves tocommunicate requirements and desired behavior to the PD-ESS Controller.It provides communication between the PD-ESS Application and PD-ESSController via the PD-ESS Application Controller Interface (ACI).Application Logic and Drivers are optionally provided. The applicationlayer may receive an abstracted view of State Data Plane Actions. ThePD-ESS Applications may interface with higher levels of abstractedcontrol. The system includes an interface, the PD-ESS ApplicationController Interface (ACI). The management and administration preferablyprovides the following: (1) To/From Application Plane, it providescontracts and SLAs, (2) To/from Control Plane Configure Policy, MonitorPerformance, and (3) To/From Data Plane Element Setup.

Turning second to the Control Plane Layer, the PD-ESS Controller isideally logically centralized entity, preferably serves to translate therequirements of the PD-ESS Application to the State Data Plane layer,and provides the Application layer with actions in the State Data Plane(e.g., event information and statistical information). The control planemay provide statistics, events and states from the Data Plane to theApplication Plane. The control plane preferably enforces behavior at alow level control in the data plane, provides capability discovery, andmonitors statistics and faults. The control plane advantageouslyincludes cognitive computing, such as artificial intelligence (AI) andmachine learning (ML), to be described in greater detail, below.

The control plane may optionally include analytics, including but notlimited to pattern recognition. Analytics may be performed on apopulation, preferably a relevant population, or on a subset.Preferably, the subset has similar characteristics of a target user.Data may be binned according to subset. The scope of primary data may beanalyzed. Predictive modeling may be included. Responsible GamingControl may be implemented at the control plane level, especially ifthere are use rate limits and global limits.

Turning thirdly to the state data plane layer, it preferably includesmain subcomponents and Functional Network Elements. Optionally, thefunctional network elements include some or all of the following: 1.Entertainment State Network Elements, 2. Value/Title Transfer NetworkElement, 3. Game Library, such as Casino, VLT, Video Gaming, Tournament,Amusement with Prize (AWP), Game Mechanics, Core Loop, Skill, Skill withReveal, Second Chance, Social, Gamification, Prizing, vGLEPs and PrizeBoard, 4. Systems, Marketing, Promotions, CRM, Operations, Logistics,Interactive, Mobile/Apps and Responsive Design, 5. Platforms, 6.Channels, 7. Lottery, including Retail and Central Systems, 8. Loyalty,9. Responsible Gaming Control, optionally including use rate limits andglobal limits (may be done in the control plane layer as well), 10.Sports, including real world, fantasy and eSports, 11. Other Live DataEntertainment, 12. Networks, including Network communications and webservices and 13. Management, including Records, Player AccountManagement, Reporting, Compliance, including regulatory compliance,security, including cybersecurity, fraud and risk management, includingpreferably audit and payment.

The Entertainment State Network Elements provide an interface forinteraction with a user of the system. An input receives informationfrom user selection. Sensors may be of various forms, including soundsensors, motion sensors, whether 2-d or 3-d, such as including theMicrosoft Kinect system. ‘Internal Data’ consists of data relatedprimarily to game operations. ‘External’ Data sources to combine withPrimary Data Source. These may include 1. Location, 2. Current Activitysuch as Driving (provided by vehicle, provided by tracked phone) orExercising (provided by FitBit or similar), 3. Economic Conditions, 4.Weather, 5. Recent Events/News, e.g., a recent Large PowerBall win, 6.Marketing Information, 7. e-mail scans, e.g., Google scanning of Gmailfor content, 8. Social Media, and 9. the Internet of Things (IoT). TheInternet of Things (IoT) provide various forms of connected devices suchas data sensors. The sensors generate data input “stimuli” to system. Byutilizing any form of input, the system is able to provide for massiveparallelism. All data “stimuli” to system permits the system to beadaptive and reactive to all data stimuli.

An Output provides stimulation to user. Forms may include: 1. images,such on a display, or via a GUI, or VR system, AR system, 2. Thin Clientdisplay with remote computing power, 3. Projections and Holograms, 4.sounds, 5. tactile stimuli, 6. olfactory stimuli, or 7. directelectrical stimuli, neural or otherwise.

A Value/Title Transfer Network Element serves to receive and transfervalue (money, coins, and other items of value). Value may refer tofungible liquid asset or other store of value. Title generally refers toownership of real, personal, or virtual property. A detailed discussionof blockchain, trust-less, and cryptocurrency systems is provided,below.

Artificial Intelligence (AI) is broadly that branch of computer sciencedealing in automating intelligent behavior. They are systems whoseobjective is to use machines to emulate and simulate human intelligenceand corresponding behavior. This may take many forms, including symbolicor symbol manipulation AI. It may address analyzing abstract symbolsand/or human readable symbols. It may form abstract connections betweendata or other information or stimuli. It may form logical conclusions.Artificial intelligence is the intelligence exhibited by machines,programs or software. It is has been defined as the study and design ofintelligent agents, in which an intelligent agent is a system thatperceives its environment and takes actions that maximize its chances ofsuccess. Yet others have defined it as the science and engineering ofmaking intelligent machines.

Artificial Intelligence often involves use of neural networks. Invarious embodiments, a multi-layer stack of neural network nodes areutilized. The lowest level comprises granular elements. By way ofexample in a gaming application, in the order of higher levelunderstanding, the levels would progress from instances of individualaction (granular), to core loop detection, to session play, tomulti-session play. Optionally, a parsing engine serves to break down orsubdivide a larger set, such as a data set or image, into more discreteor granular elements.

AI may have various attributes. It may have deduction, reasoning, andproblem solving. It may include knowledge representation or learning.Systems may perform natural language processing (communication). Yetothers perform perception, motion detection and informationmanipulation. At higher levels of abstraction, it may result in socialintelligence, creativity and general intelligence. Various approachesare employed including cybernetics and brain simulation, symbolic,sub-symbolic, and statistical, as well as integrating the approaches.

Various tools may be employed, either alone or in combinations. Theyinclude search and optimization, logic, probabilistic methods foruncertain reasoning, classifiers and statistical learning methods,neural networks, deep feedforward neural networks, deep recurrent neuralnetworks, deep learning, control theory and languages.

AI advantageously utilizes parallel processing and even massivelyparallel processing in their architectures. Graphics Processing Units(GPUs) provide for parallel processing. Current versions of GPUs areavailable from various sources, e.g., Nvidia, Nervana Systems.

Machine Learning is defined as a system that builds up knowledge fromexperience. Machine learning serves to detect patterns and laws.

Deep Learning uses Neural AI. It is easily scalable, and typicallyinvolves more layers or neural Networks (NNs). Neural Networks may be ofvarious forms, including: efficient NN, vectorized NN, vectorizedlogistic regression, vectorized logistic regression gradient output,binary classification, logistic regression, logistic regression costfunction, gradient descent, derivatives, computation graph and logisticregression gradient descent.

Deep neural networks (DNN) often involve hyperparameter tuning.Typically they utilize regularization and optimization. Sometimes theyare referred to as Deep Belief Network (DBN).

Other forms of neural networks include Convolutional Neural Networks(CNN) or Recurrent Neural Networks (RNN). Examples of available systemsinclude: LSTM, Adam, Caffe, Dropout, Batch Norm, Xavier/He, Python,Scikit-Learn and TensorFlow.

AI may operate on various forms of data sets. The data set may compriseimages, whether video images, 2D Data and/or 3D Data. Sequential datamay be analyzed. Examples include, but are not limited to, naturallanguage, audio, autonomous driving decisions, game states and gamedecisions.

Various industry applications advantageously benefit from application ofAI. They include imaging and object detecting, serving to identify,classify, mining and optionally provide sentiment analysis. Otherapplications include autonomous driving. Yet other applications includerobots and robotics. Within healthcare, functions include imaginganalysis, diagnosing and gamification. Various forms of sequential dataanalysis may be enhanced, such as speech recognition, and naturallanguage processing. Music applications include both recognition andsynthesis. Within the gaming field, applications include game statesequences detection, analysis, formation, combination optimization, andgame optimization. Chat bots and machine translation advantageouslyemploy these systems.

FIG. 7 shows the constituent function blocks within an entertainment orgaming ecosystem. Affiliates serve to acquire customers. Affiliatesreceive a commission, such as based on the number of users acquired or apercent (%) of revenue. Optionally, there is a link to a credit cardfunction (to be discussed, below in connection with FIG. 30).

Next are charities and other organizations that plan to operate alottery, game or other entertainment event. They provide for customeracquisitions. They are the recipient of the event (game, lottery orentertainment). They also collect a fee.

Next are the developers, who provide for game design. In return for gamedesign, they receive multi-jurisdictional use and payment for use. Anenhanced application or app store may be provided wherein the gamedesign may be viewed, selected and downloaded.

Next, consumers provide registration and identification information. Theregistration data may optionally include identification, age, addressand verification. Optionally, the data is sufficient that the system cancomply with Know Your Customer (KYC) rules, with optional levels ofidentity verification. This is stored as persistent history. Thecustomer receives a chance to play, win, and receive entertainment.

Next is the regulator or trust verifying agent. They provide testing,approval for game fairness, overall approval, ensure compliance withregulations and security. The regulator or trust verifying agent isgranted access permission by the system to monitoring of everytransaction, (analytics dashboard), player accounts, parameters, prizeamounts and payouts, and to the complete history. The regulator or trustverifying agent receives compensation, whether a fee or as a percentageof the transaction amounts.

Next, the lotteries serve as the trusted agent, and receive a percentageof the transaction amount. Optionally, the historical functions of thelottery may be eliminated or vaporized from the system when thosefunctions are performed by another entity within the ecosystem.

FIGS. 8 and 9 relate to the learning processes for training neuralnetworks. By providing repeated input stimulus and then training theneural network to provide the correct output, the system may be taughtto form the correct associated output based on one or more inputstimului. In converting input to the desired output the training maycomprise supervised learning, such as when the target values andparameters are supervised. Alternatively, the training may benon-supervised learning, wherein the system attempts to identifypatterns in the input that have identifiable structure and can bereproduced. Alternately, the system may use reinforcement learning,which works independently (like non-supervised learning) but is rewardedor punished depending on success or failure. Preferably, reinforcementlearning involves incremental change. In the various trainingtechniques, perturbation may be used wherein one or more inputparameters are varied, typically in a perturbation amount, e.g., lessthan 10%, more preferably less than 5%, and most preferably less than3%, of the input value, so as to monitor the effect of the perturbationon the output.

Hyperparameters and parameters may be used in the AI or machine learningsystems. Model parameters are estimated from data automatically. Aconfiguration variable internal to the model can be estimated from data.This can be required by the model when making predictions. Values definethe skill of the model. They may be estimated or learned from data.

Hyperparameters are set manually and are used in the processes to helpestimate parameters. A configuration variable external to the model isused. Generally, it cannot be estimated from the data. They are oftenused in processes to estimate model parameters. They are typicallyspecified by the system user. Hyperparameters can often be set usingheuristics. They are often tuned for a given predictive modelingproblem. A hyperledger may be used, either as a hyperledger composer orhyperledger fabric.

The AI or machine learning may be performed on various types ofhardware. Advantageously, systems that support parallel processing canprovide for computation speed and efficiency. Parallel processing unitssuch as Graphics Processing Units (GPUs) are available from NVIDIA andAMD. Neural Processing Units (NPUs) are available in the Kirin 970,Apple A11 and the Qualcomm Zeroth Processor. AI and machine learningprocessing is also available as a cloud AI or Machine learning system,such as is available from Google and Amazon Web Services.

FIG. 10 describes domain transformations and difference engines. Oneadvantageous domain transformation involves the time domain to frequencydomain (time series to frequency domain). One example is the Fourierseries, which generally is used with repetitive signals, such asoscillating systems. A Fourier transform, is generally used withnon-repetitive signals, such as transients. Enhanced computationaltechniques such as the Fast Fourier Transform (FFT) may be used forefficiency and computational speed. Yet another domain transformation isthe Laplace transform, often used in electronic circuits and controlsystems. Yet another, the Z transform, is used with generallydiscrete-time signals. Digital Signal Processors (DSPs) may beadvantageously utilized. Spectral density estimation may be included,along with wavelet analysis, image analysis, data compression andmultivariate analysis. Correlated data sets are advantageously employed.

Difference engine may be employed to identify differences between two ormore sets of data. The difference may be time based, such as where onedata set relates to a time 0, and the other set relates to a time 1,time 2, time 3, . . . , time N. Differences in images may be calculated.

FIG. 11 shows a system in which the Subject response may be monitored,captured and analyzed for behavior, which is then used as input to AI.In various efforts, such as in game or entertainment design andcreation, the response of the target audience may be monitored, analyzedand used to train an Artificial Intelligence or machine learning system.The subject response to entertainment/game stimuli serves to measure the‘fun’ experienced by the subject, and that measure (the ‘fun’) is thenused as a training input to AI or ML system. The system may detectindividual subject behavior. Alternatively, the system may monitor groupbehavior, serving to detect the ‘fun’ experiences, but may also measureattributes of the group or crowd, such as ‘excitement’, ‘engagement’ orcrowd based behavior.

A display is provided as a stimulus to the subject or subjects. A flatpanel display or monitor may be utilized. Optionally, personal viewingdevices may be utilized, such as individual screens, virtual realityheadsets, augmented reality devices, heads up displays, projectiondevices or imaging technology.

Various detectors are utilized to monitor the one or more subject'sresponse. Motion detection utilizes motion tracking hardware andsoftware. A camera images the subjects. Various cameras include theMicrosoft Kinect, 2d sensors and cameras and 3d sensors and cameras.Metrics detectors may analyze the position of a body part, such as alimb, joint or facial feature. It may measure the velocity, movement,higher level derivatives of the position or movement, such as the rateof change of change. Facial detectors monitor for facial recognition.Facial attributes may be detected, such as positive attributes, e.g., asmile, or negative attributes, e.g., a frown. Body position detectionmay be determined. Sound detection may be performed with a microphone ormicrophone array. It may detect attributes of the sound, such aspositive attributes, e.g., a cheer, and negative attributes, e.g.,expletives, and boos. Biometric scan detection is utilized. Physiologicresponse detection optionally monitors the subject heart rate, bloodpressure, pupil dilation, temperature, ECG, and mental activity.Activity monitoring detectors monitor engagement response, preferablyincluding bet rate, time spent engaged with the display, retention rate,repetition rate and reengagement rate. Analytics are advantageouslyutilized.

The output of the system is used as input in the AI or machine learningsystem. For example, in training using reinforcement learning in neuralnetworks, a positive weighting is used for positive attributes, and anegative weighting is used for negative attributes.

The system may additionally provide output identified as associated withaddiction, such as gambling addiction, or a subject otherwise being‘hooked’ on the game. When the level of engagement or minor addiction isviewed as acceptable, a positive weighting may be used in the training,whereas when the addiction is viewed as unacceptable or excessive, anegative weighting may be used in the training.

The artificial intelligence, machine learning, neural network, use ofuser response in training AI/ML systems (generally FIG. 11 anddiscussion, above), may advantageously be utilized in game design anddevelop, entertainment development and/or any creative developmentaleffort.

The systems may constitute a matrix of tools. They may comprise a givenset of tools. In a more fundamental way, they comprise a tool todiscover the tools. Tools may be game states, entertainment states orany form of state or matter.

The following will be described as to game development, but the tools,systems, methods and architectures may be applied to entertainment orany creative effort. As to a particular game, a first option is toprovide only basic rules of that given game. The system may play againstitself, or alternatively, play against other systems, in order todiscovery winning game play strategies. In yet another option, thesystem may be provided with known gambits, with the system permitted touse or ignore the gambits. In yet an alternative embodiment, the systemmay be provided with a library of games. The system may analyze thelibrary of games for game elements, game mechanics or core loops.Optionally, the system may limit analysis of the library of games tosimilar games, or may consider all games, optionally divided intosubunits, e.g. card games, board games, video games. Once the variouscore loops or game elements are defined, the system may combine them invarious combinations and permutations so as to define a new game or gameplay sequence. The system may recognize patterns in the data. Values maybe assigned to decisions at various points or game states or game statedecision points. The use of user response may be advantageously used ingame formation and optimization. The use of user response isparticularly suited to reinforced learning.

The system may operate in a hierarchical manner. Hierarchical systemsmay be used, where it may vary a ‘subservient’ mandated parameter solong as ‘superior’ or ‘master’ mandated parameter is met. By way ofexample, a ‘super’ mandated parameter’ may be used to guarantee aparticular outcome. Alternatively, an administrative control may begranted, such as to set a ‘top level’ constraint.

The system may consider separate functions in a cooperative action.Functions may be reassigned or moved to other, especially lower, levelsof action. The system may provide new variables. By providing ahierarchical response, core functionality may be maintained. Optionally,the system may employ a “kill switch” for the system, an apoptosis, suchas based on a command such as from an administrator, or based onpredefined criteria. The system may provide a package of experience(‘Total Recall’) such as in a continuous state and/or persistent state.

FIGS. 12 & 13 relate to various dynamic, that is changeable, systems. Inthe designation “d-API” and “d-SDK”, ‘d’ stands for ‘dynamic’ and iscapable of change within and by the system. The format of theinteraction (request and/or response) may be changes. Alternately, itmay change the type, quantity or quality of information provided in theresponse. Other factors that may be changed include the ability of therequest to alter the information via the API or SDK. Changes may be madeto other operational or administrative rights or permissions, such asread only access, read and write, edit rights, super administrativerights. These provide for dynamic change under adaptive control.

Within the dynamic-Application Programming Interface (d-API), an initialformat for request and response is defined. This may be considered in an‘if-then’ statement: IF you ask for X in an agreed upon format, THENsystem will provide X. The dynamic system may vary the format, and/orresponse. An intelligent dynamic update may be based on AI, machinelearning or analytics. While not limited to the following, some or allof these changes may be implemented dynamically: the format of theinteraction (request and/or response), access to more information orfunctionality, e.g. read only, or modification rights, the ability toprovide information or data to the system, and the ability to changedata.

Within the dynamic Game Development Kit (d-GDK), an initial kit isprovided. The system then permits dynamic modification of the GDK.Preferably, dynamic modification is based on AI or Machine Learning oranalytics.

Dynamic Segregated Lottery (d-SL) may be provided wherein one or morefunctional units or the lottery may be provided. A virtualized systemmay be utilized, such as in the use of a virtualized server.

FIGS. 14-20 relate to a blockchain implementation for games,entertainment or other useful ends. Blockchain uses a cryptographic‘hash’ to identifies each block and transaction. Each successive blockcontains a hash of the previous code. This permanently fixestransactions in chronological order. The blockchain utilizes both aprivate key and public key. The prior hash is added to the newblockchain with a nonce to form a new hash.

Cryptocurrency provides for cryptographically secure transactions.Cryptocurrency is a programmable currency or decentralized valuetransfer system. It is also a decentralized virtual currency ordecentralized digital currency.

Proof of work, or proof of stake, is the “right” to participate in theblockchain. It must be onerous enough to prevent changes without redoingthe work. Bitcoin is a created currency which is mined and serves as areward for payment processing work. Blockchain cryptocurrency involvesno transaction charges or fees paid by purchaser. There are no refundrights or chargebacks.

It may be implemented in any form of network, both public and private.Open software and proprietary software may be used. Storage may be localstorage or cloud storage and computing. Analytics may be performedlocally or in a cloud analytics system. Analytics As A Service (AAAS)may be performed. Systems may be permissioned v. permission lessdistributed systems.

FIGS. 21 through 23 relate to smart contracts. The core elements are,first, a set of promises which may be contractual or non-contractual.Second, they are specified in digital form, operate electronically,where the contractual clauses or functional outcomes embedded in code.Third, they include protocols, or technology enabled rules-basedoperations. Fourth, the parties perform on the promises throughautomated performance, in a generally irrevocable manner.

Smart contracts automate different processes and operations. In oneembodiment, they automate “if-this-then-that” on self-executing basiswith finality. They may provide for payments. Actions may be conditionedon a payment or payments, such as with the control of collateral basedon payment.

Smart contracts may be implemented via blockchain. This forms a trustedsystem, which may be implemented in a business to businessimplementation (B to B) and/or peer-to-peer implementation. Themachine-to-machine implementation permits various combinations. In oneimplementation, a blockchain is combined with devices comprising theInternet of Things (IoT). In yet another combination, the blockchain maybe combined with devices comprising the Internet of Things incombination with artificial intelligence. Generally, the block containssmart contract program logic. It bundles together the messages relatingto a particular smart contract including inputs, outputs, and logic. Inyet another implementation, they may provide contracts for difference,such as in use the current market price to adjust balances and dispersecash flow.

Smart contracts are a trust shifting technology. They reducecounter-party risk. Preferably, this serves to increase credit.

Smart contracts may be implemented in various models. They may be acontract entirely in code. They may be a contract in code with separatenatural language version. They may be split natural language contractwith encoded performance. Alternatively, they may be a natural languagecontract with encoded payment mechanism.

Smart contract initiation involves a consensus. An algorithm constitutesa set of rules for how each participant in the contract processesmessages. They may be implemented in a permission-less manner, whereinanyone may submit messages for processing. The submitter may be involvedin consensus. Alternately, they may delegate decision making such as toan administrator or sub-group of participants. An alternativeimplementation is to have a permissioned system, in which theparticipants are limited. They are generally pre-selected. They are thensubject to gated entry and be subject to the satisfaction of certainrequirements and/or approval of an administrator.

Smart contracts are subject to various methods of formation. They may byagreement such as where there is a common cooperative opportunity or adefined desired outcome. These may include business practices, assetswaps, and transfer of rights. Next, conditions set for initiation ofthe contract. That may be by the parties themselves, or by theoccurrence of some external event, such as time, other quantifiablemeasure or location. Typically, they generate a code, which is encryptedand chained with blockchain technology. It may be authenticated andverified. Upon execution and processing, the network updates all ledgersto indicate current state. Once verified and posted, they cannot bechanged, with only additional blocks appended.

To restate, the smart contract serves as a distributed application onnetworks with independent built-in trust mechanisms. The program isentrusted with the unit of value combined with rules for transfer ofownership of the unit of value. They serve as self-executing programsthat automatically fulfill the terms of a programmed relationship.

FIG. 20 shows a Lottery embodiment implemented as a smart contract. Themethod for implementing a lottery includes the following steps. A timeframe is set in which to receive cryptocurrency. Second, cryptocurrencyis received with owner identification within the timeframe. The windowopens for a specified duration, afterwards at which the window closes.The smart contract generates or receives a random event, such as from arandom number generator. The random number generator should include analgorithmic guarantee of randomness and a guarantee of no hack. Thecontract selects a new owner (winner) among the owner identificationrelated cryptocurrencies. It then assigns new ownership ofcryptocurrency to selected new owner (winner).

Smart contracts may be used to implement a core loop or a game mechanic.The following core loops and game mechanics comprise a partial list ofthose that may be implemented, including but not limited to JACKO, POKO,Hot Seat, Hi Lo, Rock, Paper Scissors, In the Zone and iLotto or otherarray or geography based game mechanics or core loops. Any subunit ofthe game mechanic or core loop may itself be used as a game mechanic orcore loop.

Jacko is a game comprising the steps of: randomly selecting a targetnumber from a first range of numbers having a minimum and maximumnumber, presenting an indication of the target number to the player,selecting a number for the player, the number being selected from asecond range, having a minimum and maximum, where the maximum is equalto or less than ½ of the minimum of the first range, receiving anindication from the player whether to draw again, and if so, randomlyselecting a number from the second range, accumulating the total of theplayer's draws, and repeating this step until either the player declinesto draw or the total exceeds the target number, and in the event theplayer declines to draw, randomly selecting numbers from the secondrange, accumulating those numbers, comparing them to the player'saccumulated amount, and assigning as to the winner whomever has a totalclosest to, but not exceeding, the target.

Poko is a multi-player game where multiple indicia are awarded apredefined value, where other players have no information as to at leastsome of the indicia held by other players.

High Lo is a game comprising the steps of: performing a first lotteryselection of a series of randomly drawn numbers, receiving from a playeran indication whether the next randomly drawn number will be higher orlower than the preceding number, and if correct, awarding winningscorrelated to the amount of the randomly drawn number, and continuinguntil the player fails to predict the high/low outcome, or elects tostop.

In the Zone is a game of chance comprising the steps of randomlyselecting a player's target number within a predefined range of numbers,the range having a minimum and a maximum, randomly selecting a series ofnumbers for use in a lottery game, the minimum of the predefined rangeof numbers being at least equal to the sum of the lowest possible totalfor the series of the lowest possible total for the series of numbersand the maximum of the predefined range of numbers, totaling the randomselected series of numbers through the conclusion of the selection, andassigning prize amounts to players having a player's number notexceeding the total based upon the proximity of the player's number andthe total number.

Rock Paper Scissors is a game with three or more options having anassigned priority of options relative to one another.

Hot Seat is a game of increasing risk/reward including the ability to‘opt out’ in Smart Contract. A method for game play in a multi-levelgame of chance culminating in a final level, comprises the steps ofpresenting, at a given level, a plurality of random options wherein atleast one option is a positive option, another option is a negativeoption, and a third option requiring a further decision, receiving aselection regarding which one of the plurality of random option isselected, and if the positive option was selected, cumulating thepositive option result with the prior positive option results, but ifthe negative option was selected, cumulating the negative option result,comparing the cumulative result with a predetermined number, andreplaying the same level if the cumulative number is less than thepredetermined number or terminating the game if the cumulative numberequals the predetermined number, and if the third option was selected,receiving a selection regarding the decision, respecting the above stepsuntil the player stops, the predetermined number of negative eventsoccurring or the final level is related.

iLotto is a grid or geography based system including a display forpresenting a grid of identifying objects, an input for receiving aplayer selection of an identifying object, a random generator forrandomly selecting a winning identifying object, and a point tallysystem for awarding points to the player according to the rulescomprising a first point value if the player selected identifying objectexactly matches the winning identifying object, a second point value ifthe player selected identifying object is in a geometric relationshipwith the winning identifying object, and a third, negative, point valueif the player is not awarded the first point value or the second pointvalue.

FIG. 23 relates to implementation of mandated and variable parameters.Mandated parameters are set in smart contracts. Examples of mandatedparameters include payout percentage and payout amount. Variableparameters are subject to mandated parameters, providing entertainmentoptions.

FIG. 24 depicts a wallet serving for the electronic storage ofcryptocurrency. This represents a graphical user interface (“GUI”), suchas on a phone or computer display. Various forms of cryptocurrency maybe displayed on the GUI and stored in the wallet. Points may be awarded,such as for loyalty, frequency and airtimes. Recent or latesttransactions may be listed, indicating the date, purpose and amount. Atotal account value may be shown.

Cryptocurrency systems and smart contracts may be implemented incombination with other systems. One additional system comprises afrequent user or player's club system. They may be combined with otherforms of ‘currency lite’, including micro-transactions andmicro-payments. They may be used in combinations with smart properties,that is digital assets or physical things that know who their owner is.Digital assets are anything that exists in digital, typically binary,format and comes with the right to use. Examples include images,including still pictures and video or dynamic images, audible content,such as sounds, music or performances, and digital documents. Propertywhose ownership is controlled via distributed trusted network, e.g.,blockchain using contracts. They may be further used in combination withgeolocation, wherein the physical location (geolocation) of variouscomponents and architectural components are optionally a component ofthe system. Limits may be placed on the geography of game play. Thesystem can ensure compliance with geolocation of data routing.

FIGS. 25 through 27 relate to systems having segregated secure functionsand public functions. This provides a secure platform with multipleinterfaces to public functions and public entities. The segregatedsecure functions provide the function of the trusted agent. The securefunctions include one or more of the following. First, outcomedetermination. This may include the use of a random number generator(RNG) or probability engine. Second, user or player account informationis stored. Third, monetary accounting or transactions are stored.Fourth, regulatory and compliance interface is performed. Fifth,interfaces such as a developer interface. Sixth, regulatory functionsincluding Q&A testing, compliance, testing and approval may be provided.

The public functions include some or all of the following. First, thepublic system issues a ‘call’ to the secure system. A ‘call’ may be viaan Application Programming Interface (API) or d-API. The “OPEN” systemcall makes calls to secure system for secure data. Second, a designerinterface serves to access tools, APIs, a Development Kit (DK), and aSoftware Development Kit (SDK). Third, a marketplace interface serves asa lottery interface and optionally an application or app store. Fourth,an operator interface serves to interface with an operator or organizer,e.g., a charity. It preferably serves to publish, market, and sell.Fifth, the user interface permits registration, play activity andpersistent history.

The system components may vary by function. Public interfaces andfunctions preferably comprise an “open” platform. This allows forarbitration and agreement with the secure entity regarding gameoperations to be performed by the secure entity, e.g., payout %, vGLEPs,who may play, and geolocation. The secure entity performs securefunctions including game outcomes, financial matters and secure userdata. The end users utilize a “channel mix”, including but not limitedto web, mobile app, mobile web, tablet, computer, display enabledDevices (wireless), touch screen equipment at retailer, e.g., countertopgames. The private entity may impose rate limits and impose responsiblegaming controls.

FIGS. 28 and 29 describe hybrid and hierarchical systems. A centralizedsystem, such as a state run lottery may be combined with a decentralizedsystem, such as a blockchain implementation. Hierarchical order may beimposed within the system. In a system using mandated and variableparameters, a hierarchy of mandated parameters may be established, andthen various variable parameters may be subject to the appropriatemandated parameter. In another application, a global use rate limit maybe imposed at a high level in the hierarchy. Hierarchical use ratelimits may be imposed. Various topologies of systems include masterslave, master over multiple slaves and circular systems.

FIG. 30 relates to a game or lottery linked credit card and credit cardfunction. A credit card and credit functionality may be linked tolottery or other game play. Through use of the credit card, a conversionrate is established. By way of example, for every $100 of purchases, $1in lottery play is made. The rate may be variable, such as based uponinstitution. In the event a charitable organization organized orsponsored the lottery or game, every $100 of purchases accrues $2 forthe organization. A split may also be performed, such as for every $100of purchases accrues $1 in the lottery or game for the credit card ownerand $1 for the organization.

In alternative embodiments, the mobile gaming device may be connected tothe gaming machine with a cable, either directly connected to a port ofthe gaming machine or via a network communicating with the gamingmachine.

The software used to program the gaming machines and servers inaccordance with the embodiments described herein may be initially storedon a ROM, such as a CD or an electronic memory device. Such CDs anddevices are non-transitory computer readable mediums having theappropriate computer instructions stored thereon. The programming mayalso be downloaded to the gaming machines via the casino's network.

It should be appreciated that the terminals, processors, or computersdescribed herein may be embodied in any of a number of forms, such as arack-mounted computer, a desktop computer, a laptop computer, or atablet computer. Additionally, a computer may be embedded in a deviceperhaps not generally regarded as a computer but with suitableprocessing capabilities, including an electronic gaming machine, a WebTV, a Personal Digital Assistant (PDA), a smart phone or any othersuitable portable or fixed electronic devices.

Also, a computer may have one or more input and output devices. Thesedevices can be used, among other things, to present a user interface.Examples of output devices that can be used to provide a user interfaceinclude printers or display screens for visual presentation of outputand speakers or other sound generating devices for audible presentationof output. Examples of input devices that can be used for a userinterface include keyboards, and pointing devices, such as mice, touchpads, and digitizing tablets. As another example, a computer may receiveinput information through speech recognition or in other audibleformats.

Such computers may be interconnected by one or more networks in anysuitable form, including as a local area network or a wide area network,such as an enterprise network or the Internet. Such networks may bebased on any suitable technology and may operate according to anysuitable protocol and may include wireless networks, wired networks orfiber optic networks. As used herein, the term “online” refers to suchnetworked systems, including computers networked using, e.g., dedicatedlines, telephone lines, cable or ISDN lines as well as wirelesstransmissions. Online systems include remote computers using, e.g., alocal area network (LAN), a wide area network (WAN), the Internet, aswell as various combinations of the foregoing. Suitable user devices mayconnect to a network for instance, any computing device that is capableof communicating over a network, such as a desktop, laptop or notebookcomputer, a mobile station or terminal, an entertainment appliance, aset-top box in communication with a display device, a wireless devicesuch as a phone or smartphone, a game console, etc. The term “onlinegaming” refers to those systems and methods that make use of such anetwork to allow a game player to make use of and engage in gamingactivity through networked, or online systems, both remote and local.For instance, “online gaming” includes gaming activity that is madeavailable through a website on the Internet.

Also, the various methods or processes outlined herein may be coded assoftware that is executable on one or more processors that employ anyone of a variety of operating systems or platforms. Additionally, suchsoftware may be written using any of a number of suitable programminglanguages and/or programming or scripting tools, and also may becompiled as executable machine language code or intermediate code thatis executed on a framework or virtual machine.

In this respect, embodiments may provide a tangible, non-transitorycomputer readable storage medium (or multiple computer readable storagemedia) (e.g., a computer memory, one or more floppy discs, compact discs(CD), optical discs, digital video disks (DVD), magnetic tapes, flashmemories, circuit configurations in Field Programmable Gate Arrays orother semiconductor devices, or other non-transitory, tangiblecomputer-readable storage media) encoded with one or more programs that,when executed on one or more computers or other processors, performmethods that implement the various embodiments discussed above. Thecomputer readable medium or media can be transportable, such that theprogram or programs stored thereon can be loaded onto one or moredifferent computers or other processors to implement various aspects asdiscussed above. As used herein, the term “non-transitorycomputer-readable storage medium” encompasses only a computer-readablemedium that can be considered to be an article of manufacture or amachine and excludes transitory signals.

The terms “program” or “software” are used herein in a generic sense torefer to any type of computer code or set of computer-executableinstructions that can be employed to program a computer or otherprocessor to implement various aspects of, as discussed above.Additionally, it should be appreciated that according to one aspect ofthis embodiment, one or more computer programs that when executedperform methods need not reside on a single computer or processor, butmay be distributed in a modular fashion amongst a number of differentcomputers or processors to implement various aspects of embodimentsdescribed herein.

Computer-executable instructions may be in many forms, such as programmodules, executed by one or more computers or other devices. Generally,program modules include routines, programs, objects, components, datastructures, etc. that perform particular tasks or implement particularabstract data types. Typically the functionality of the program modulesmay be combined or distributed as desired in various embodiments.

Also, data structures may be stored in computer-readable media in anysuitable form. For simplicity of illustration, data structures may beshown to have fields that are related through location in the datastructure. Such relationships may likewise be achieved by assigningstorage for the fields with locations in a computer-readable medium thatconveys relationship between the fields. However, any suitable mechanismmay be used to establish a relationship between information in fields ofa data structure, including through the use of pointers, tags, addressesor other mechanisms that establish relationship between data elements.

Various aspects of embodiments described herein may be used alone, incombination, or in a variety of arrangements not specifically discussedin the embodiments described in the foregoing and the concepts describedherein are therefore not limited in their application to the details andarrangement of components set forth in the foregoing description orillustrated in the drawings. For example, aspects described in oneembodiment may be combined in any manner with aspects described in otherembodiments.

Also, embodiments described herein may provide a method, of which anexample has been provided. The acts performed as part of the method maybe ordered in any suitable way. Accordingly, embodiments may beconstructed in which acts are performed in an order different thanillustrated, which may include performing some acts simultaneously, eventhough shown as sequential acts in illustrative embodiments.

While embodiments have been described with reference to certainexemplary features thereof, those skilled in the art may make variousmodifications to the described embodiments. The terms and descriptionsused herein are set forth by way of illustration only and not meant aslimitations. In particular, although embodiments have been described byway of examples, a variety of devices would practice the inventiveconcepts described herein. Embodiments have been described and disclosedin various terms, the scope of the embodiments is not intended to be,nor should it be deemed to be, limited thereby and such othermodifications or embodiments as may be suggested by the teachings hereinare particularly reserved, especially as they fall within the breadthand scope of the claims here appended. Those skilled in the art willrecognize that these and other variations are possible as defined in thefollowing claims and their equivalents. Although the foregoing inventionhas been described in some detail by way of illustration and example forpurposes of clarity and understanding, it may be readily apparent tothose of ordinary skill in the art in light of the teachings of thisinvention that certain changes and modifications may be made theretowithout departing from the spirit or scope of the appended claims.

All publications and patents cited in this specification are hereinincorporated by reference as if each individual publication or patentwere specifically and individually indicated to be incorporated byreference in their entirety.

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GLOSSARY

51% Attack: An attack on the Bitcoin network which allows the attackerto create fraudulent transactions, see Double Spend. This is possiblebecause controlling more than 50% of the Bitcoin network's hash ratemeans the attacker can out-compute everyone else who is mining.

A

Account: Accounts have an intrinsic balance and transaction countmaintained as part of the Ethereum state. They also have some (possiblyempty) EVM Code and a (possibly empty) Storage State associated withthem. Though homogenous, it makes sense to distinguish between twopractical types of account: those with empty associated EVM Code (thusthe account balance is controlled, if at all, by some external entity)and those with non-empty associated EVM Code (thus the accountrepresents an Autonomous Object). Each Account has a single Address thatidentifies it.

Address: A bitcoin address is used to receive and send transactions onthe bitcoin network. It contains a string of alphanumeric characters,but can also be represented as a scannable QR code. A bitcoin address isalso the public key in the pair of keys used by bitcoin holders todigitally sign transactions (see Public Key).

Address: A code, e.g. a 160-bit code, used for identifying Accounts.

Agreement Ledger: An agreement ledger is distributed ledger used by twoor more parties to negotiate and reach agreement.

Airdrop: A method of distributing cryptocurrency amongst a population,first attempted with Auroracoin (auroracoin) in early 2014.

Algorithm: A process or set of rules to be followed in calculations orother problem-solving operations, especially by a computer.

Altcoin: The collective name for cryptocurrencies offered asalternatives to bitcoin. Litecoin, Feathercoin and PPcoin are allaltcoins.

AML: Anti-Money Laundering techniques are used to stop people convertingillegally obtained funds, to appear as though they have been earnedlegally. AML mechanisms can be legal or technical in nature. Regulatorsfrequently apply AML techniques to bitcoin exchanges.

App: An end-user-visible application, e.g. hosted in the EthereumBrowser.

Application Program Interface (API): A specification used as aninterface by components, often software components, to communicate withone another. May include specifications for routines, data structures,object classes, and variables.

Arbitrage: The generation of risk free profits by trading betweenmarkets which have different prices for the same asset.

ASIC: An Application Specific Integrated Circuit is a silicon chipspecifically designed to do a single task. In the case of bitcoin, theyare designed to process SHA-256 hashing problems to mine new bitcoins.

ASIC Miner: A piece of equipment containing an ASIC chip, configured tomine for bitcoins. They can come in the form of boards that plug into abackplane, devices with a USB connector, or standalone devices includingall of the necessary software, that connect to a network via a wirelesslink or ethernet cable.

ASIC Mining: Many miners purchase separate computing devices set asidesolely for mining. As an alternative, they can also get an ApplicationSpecific Integrated Circuit (ASIC); this is a specially-designedcomputer chip created to perform one specific function, and only thatfunction—in this case, mining calculations. ASICs reduce the processingpower and energy required for mining, and can help reduce the overallcost of the process in that way. Whether the ASIC—a term that refers tothe specialized chip itself—is integrated into an existing computingsystem, or functions as a stand-alone device, the term “ASIC” is oftenused generically to refer to the overall system itself, and not just thechip.

Asymmetric Key Algorithm: This is the algorithm used to generate publicand private keys, the unique codes that are essential to cryptocurrencytransactions. In a symmetric key algorithm, both the sender and receiverhave the same key; they can encrypt and exchange information privately,but since both parties have the decoding information, they can't keepinformation private from one another. With an asymmetric key algorithm,both parties have access to the public key, but only the person with theprivate key can decode the encryption; this assures that only they canreceive the funds.

Attestation Ledger: A distributed ledger providing a durable record ofagreements, commitments or statements, providing evidence (attestation)that these agreements, commitments or statements were made.

Autonomous Agents: Software that makes decisions and acts on themwithout human intervention.

Autonomous Object: A notional object existent only within thehypothetical state of Ethereum. Has an intrinsic address and thus anassociated account; the account will have non-empty associated EVM Code.Incorporated only as the Storage State of that account.

B

Base58: Base58 encodes binary data into text and is used to encodeBitcoin addresses. Created by Satoshi Nakamoto, its alphanumericcharacters exclude “0”, “O”, “1”, I” since they are hard to distinguish.

Base58Check: A variant of Base58 used to detect typing errors in bitcoinaddresses.

BIP: An acronym for “Bitcoin Improvement Proposals” which can besubmitted by anyone who wants to improve the Bitcoin network.

Bit: Name of a Bitcoin denomination equal to 100 satoshis (1 millionthof 1 BTC). In 2014 several companies including Bitpay and Coinbase, andvarious wallet apps adopted bit to display bitcoin amounts.

Bitcoin (uppercase): The well know cryptocurrency, based on theproof-of-work blockchain.

bitcoin (lowercase): The specific collection of technologies used byBitcoin's ledger, a particular solution. Note that the currency isitself one of these technologies, as it provides the miners with theincentive to mine.

Bitcoin (unit of currency): 100,000,000 satoshis. A unit of thedecentralized, digital currency which can be traded for goods andservices. Bitcoin also functions as a reserve currency for the altcoinecosystem.

Bitcoin 2.0: A reference word for applications of bitcoin or Blockchaintechnology that is more advanced or complicated than the basic paymentsystem application proposed by the Bitcoin white paper. Examples ofBitcoin 2.0 projects include Counterparty, Ethereum, Blockstream, Swarm,Domus and Hedgy.

Bitcoin ATM: A bitcoin ATM is a physical machine that allows a customerto buy bitcoin with cash. There are many manufacturers, some of whichenable users to sell bitcoin for cash. They are also sometimes called‘BTMs’ or ‘Bitcoin AVMS’. CoinDesk maintains a worldwide map ofoperational bitcoin ATM machines and a list of manufacturers.

Bitcoin Core: New name of Bitcoin QT since release of version 0.9 onMar. 19, 2014. Not to confuse with CoreBitcoin, an Objective-Cimplementation published in August 2013.

Bitcoind: Original implementation of Bitcoin with a command lineinterface. Currently a part of BitcoinQT project. “D” stands for“daemon” per UNIX tradition to name processes running in background.

Bitcoin Days Destroyed: An estimate for the “velocity of money” with theBitcoin network. This is used because it gives greater weight tobitcoins that have not been spent for a long time, and better representsthe level of economic activity taking place with bitcoin than totaltransaction volume per day.

Bitcoin Investment Trust: This private, open-ended trust investsexclusively in bitcoins and uses a state-of-the-art protocol to storethem safely on behalf of its shareholders. It provides a way for peopleto invest in bitcoin without having to purchase and safely store thedigital currency themselves.

Bitcoinj: A Java implementation of a full Bitcoin node by Mike Hearn.Also includes SPV implementation among other features.

BitcoinJS: An online library of javascript code used for Bitcoindevelopment, particularly web wallets.bitcoinjs.org(http://bitcoinjs.org)

Bitcoin Market Potential Index (BMPI): The Bitcoin Market PotentialIndex (BMPI) uses a data set to rank the potential utility of bitcoinacross 177 countries. It attempts to show which markets have thegreatest potential for bitcoin adoption.

Bitcoin Network: The decentralized, peer-to-peer network which maintainsthe blockchain. This is what processes all Bitcoin transactions.

Bitcoin Price Index (BPI): The CoinDesk Bitcoin Price Index representsan average of bitcoin prices across leading global exchanges that meetcriteria specified by the BPI. There is also an API for developers touse.

Bitcoin Protocol: The open source, cryptographic protocol which operateson the Bitcoin network, setting the “rules” for how the network runs.

BitcoinQT: Bitcoin QT is an open source software client used by yourcomputer. It contains a copy of the blockchain and once installed itturns your computer into a node in the Bitcoin Network. Also acts as a“desktop wallet.”

Bitcoin-ruby: A Bitcoin utilities library in Ruby by JulianLangschaedel. Used in production on Coinbase.com

Bitcoin Sentiment Index (BSI): The Bitcoin Sentiment Index is a measureof whether individuals feel the digital currency's prospects areincreasing or decreasing on any given day, and is powered by datacollected by Qriously.

Bitcoin Whitepaper: The bitcoin whitepaper was written by ‘SatoshiNakamoto’ and posted to a Cryptography Mailing list in 2008. The paperdescribes the bitcoin protocol in detail, Satoshi Nakamoto followed thisby releasing the bitcoin code in 2009.

Bitcoin white paper: In November 2008, a paper, authored (probablypseudonymously) by Satoshi Nakamoto, was posted on the newly createdBitcoin.org website with the title ‘Bitcoin: A Peer-to-Peer ElectronicCash System’. The eight-page document described methods of using apeer-to-peer network to generate “a system for electronic transactionswithout relying on trust” and laid down the working principles of thecryptocurrency.

Bitcore: A Bitcoin toolkit by Bitpay written in JavaScript. Morecomplete than Bitcoinjs.

BitPay: A payment processor for bitcoins, which works with merchants,enabling them to take bitcoins as payment.

BitStamp: An exchange for bitcoins that has been gaining in popularity.

Block: This is a collection of transaction data, one of the fundamentalelements of cryptocurrency. As transactions are made, the pertinentinformation for each one is collected, and when the gathered datareaches a predetermined size, it's bundled up as a block. As soon aspossible after blocks are created, they're processed by investors fortransaction verification; this process is known as mining.

Blockchain: The full list of blocks that have been mined since thebeginning of the bitcoin cryptocurrency. The blockchain is designed sothat each block contains a hash drawing on the blocks that came beforeit. This is designed to make it more tamperproof. To add furtherconfusion, there is a company called Blockchain, which has a verypopular blockchain explorer and bitcoin wallet.

Block Halving: [see Halving], The halving of the bitcoin reward thatminers receive for mining a block. This takes place approximately every4 years (every 210,000 block to be precise).

Block Header: Contains information about a block, such as the hash ofthe previous block header, its version number, the current target, atimestamp, and a nonce.

Block Height: Block height refers to the number of blocks connectedtogether in the block chain. For example, Height 0, would be the veryfirst block, which is also called the Genesis Block.

Blockchain.info: A web service running a Bitcoin node and displayingstatistics and raw data of all the transactions and blocks. It alsoprovides a web wallet functionality with lightweight clients forAndroid, iOS and OS X.

Block Reward: The reward given to a miner which has successfully hasheda transaction block. This can be a mixture of coins and transactionfees, depending on the policy used by the cryptocurrency in question,and whether all of the coins have already been successfully mined.Bitcoin currently awards 25 bitcoins for each block. The block rewardhalves when a certain number of blocks have been mined. In bitcoin'scase, the threshold is every 210,000 blocks.

Bootstrapping: Technique for uploading the program onto a volunteer'scomputer or mobile device through a few simple instructions that set therest of the program in motion.

BOT Trading: Software programs that operate on trading platforms,executing buy and sell orders with pre-programmed trading instructions.

Brain Wallet: [see Wallet] A bitcoin wallet which uses a long string ofwords to secure its coins. This “passphrase” can be memorized, allowingthe wallet owner to spend bitcoins by simply remembering the passphrase.

Brainwallet.org: Utility based on bitcoin to craft transactions by hand,convert private keys to addresses and work with a brain wallet.

BTC: The short currency abbreviation for bitcoins.

Buy Order: A buy order is established when an investor approaches anexchange and wants to purchase cryptocurrency. These can range from verysimple orders (“I want to spend x amount of dollars on Bitcoins”) tocomplex ones that include factors such as time frame in which the ordershould be filled, range of price, and so forth. Most exchanges allow forthese to be entered online, but some investors prefer to go over thedetails directly with an exchange representative. Buy orders don'tnecessarily guarantee your purchase; if your price is too low, forexample, the offer may expire without being filled unless you makeadjustments

C

Capital Controls: These are local measures such as transaction taxes,limits, or other prohibitions that a government can use to regulateflows from capital markets into and out of the country.

Casascius Coins: Physical collectible coins produced by Mike Caldwell.Each coin contains a private key under a tamper-evident hologram. Thename “Casascius” is formed from a phrase “call a spade a spade”, as aresponse to a name of Bitcoin itself.

Central Ledger: A central ledger refers to a ledger maintained by acentral agency.

Change: Informal name for a portion of a transaction output that isreturned to a sender as a “change” after spending that output. Sincetransaction outputs cannot be partially spent, one can spend 1 BTC outof 3 BTC output only be creating two new outputs: a “payment” outputwith 1 BTC sent to a payee address, and a “change” output with remaining2 BTC (minus transaction fees) sent to the payer's addresses. BitcoinQTalways uses new address from a key pool for a better privacy.Blockchain.info sends to a default address in the wallet. A commonmistake when working with a paper wallet or a brain wallet is to make achange transaction to a different address and then accidentally deleteit. E.g. when importing a private key in a temporary Bitcoin QT wallet,making a transaction and then deleting the temporary wallet.

Checkpoint: A hash of a block before which the BitcoinQT clientdownloads blocks without verifying digital signatures for performancereasons. A checkpoint usually refers to a very deep block (at leastseveral days old) when it is clear to everyone that the block isaccepted by the overwhelming majority of users and reorganization withnot happen past that point. It also helps protecting most of the historyfrom a 51% attack. Since checkpoints affect how the main chain isdetermined, they are part of the protocol and must be recognized byalternative clients (although the risk of reorganization past thecheckpoint would be incredibly low).

Circle: Circle is an exchange and wallet service, offering usersworldwide the chance to store, send, receive and exchange bitcoins.

Client: A software program running on a desktop or laptop computer, ormobile device. It connects to the bitcoin network and forwardstransactions. It may also include a bitcoin wallet (see Node).

the Cloud: A reference to the Internet and functions it can carry outfor anyone such as storage, file sending, and using apps.

Cloud-hashing/mining: A type of mining where people can pay to rentcomputer power from someone else in the cloud to mine bitcoin or othercryptocurrencies. This is done by selling mining contracts. Cloudhashingis also the name of a business which offers this service.

Coin: An informal term that means either 1 bitcoin, or an unspenttransaction output that can be spent.

Coin Age: The age of a coin, defined as the currency amount multipliedby the holding period.

Coinbase: Another name for the input used in a bitcoin's generationtransaction. When a bitcoin is mined, it doesn't come from anotherbitcoin user, but is generated as a reward for the miner. That reward isrecorded as a transaction, but instead of another user's bitcoinaddress, some arbitrary data is used as the input. Coinbase is also thename of a bitcoin wallet service that also offers payment processingservices for merchants and acts as an intermediary for purchasingbitcoins from exchanges.

Coinbase.com: US-based Bitcoin/USD exchange and web wallet service.

Cold Storage: The safest way to store private keys is by keeping themoffline in “cold storage”. This could be in the form of a hardwarewallet, USB stick or paper wallet. These wallets are known as “coldwallets”.

Collective Mining: The commitment of resources and materials to theprocess of mining digital currency data blocks often proves to be tooexpensive for individuals to take part. As a result, many enterprisingbusinesses have worked out a way to make mining more affordable forthose miners who would otherwise be left out. These companies invest inthe hardware that allows for high-end mining power, and they in turnlease the access to this mining capability to third parties. As anindividual miner, this means you can sign a contract that allows you touse a predetermined amount of mining power through cloud computing,without the hassle or expense of buying or maintaining the processingpower needed to do so. The block rewards that come with the successfulmining of the data block go to the individual miner who purchased thecontract from the collective mining company.

Colored Coins: A proposed add-on function for bitcoin that would enablebitcoin users to give them additional attributes. These attributes couldbe user-defined, enabling you to mark a bitcoin as a share of stock, ora physical asset. This would enable bitcoins to be traded as tokens forother property.

CompactSize: Original name of a variable-length integer format used intransaction and block serialization. Also known as “Satoshi's encoding”.It uses 1, 3, 5 or 9 bytes to represent any 64-bit unsigned integer.Values lower than 253 are represented with 1 byte. bytes 253, 254 and255 indicate 16-, 32- or 64-bit integer that follows. Smaller numberscan be presented different. In bitcoin-ruby it is called “var_int”, inBitcoinj it is Varint. BitconQT also has even more compactrepresentation called Varint which is not compatible with CompactSizeand used in block storage.

Confirmation: The act of hashing a bitcoin transaction successfully intoa transaction block, and cementing its validity. A single confirmationwill take around 10 minutes, which is the average length of time for atransaction block to be hashed. However, some more sensitive or largertransactions may require multiple confirmations, meaning that moreblocks must be hashed and added to the blockchain after thetransaction's block has been hashed. Each time another block is added tothe blockchain after the transaction's block, the transaction isconfirmed again.

Confirmation Number: Confirmation number is a measure of probabilitythat transaction could be rejected from the main chain. “Zeroconfirmations” means that transaction is unconfirmed (not in any blockyet). One confirmation means that the transaction is included in thelatest block in the main chain. Two confirmations means the transactionis included in the block right before the latest one. Probability oftransaction being reversed (“double spent”) is diminishing exponentiallywith more blocks added “on top” of it.

Confirmed Transaction: Transaction that has been included in theblockchain. Probability of transaction being rejected is measured in anumber of confirmations.

Consensus Point: A point—either in time, or defined in terms of a setnumber or volume of records to be added to the ledger—where peers meetto agree the state of the ledger.

Consensus Process: The process a group of peers responsible formaintaining a distributed ledger used to reach consensus on the ledger'scontents.

Contract: Informal term used to mean both a piece of EVM Code that maybe associated with an Account or an Autonomous Object.

Core Developers: Programmers working on the open-source Source Code forBitcoin. They are not formally employed by or paid by, and are not incontrol of, the Bitcoin Network; however, they have elevated access onthe GitHub resource page for the Bitcoin Network where the main“reference” version of the Source Code is developed.

Counterfeiting: The act of imitating something in order to commitfraudulent behavior. An example of this is shopping with fake money.

CPU: Central Processing Unit—the ‘brain’ of a computer. In the earlydays, these were used to hash bitcoin transactions, but are now nolonger powerful enough. They are still sometimes used to hashtransactions for altcoins.

Crowdsourcing: The pooling of resources such as information or moneycontributed by the general population, to a goal. This is usually doneonline via websites where people can donate.

Cryptocurrency: A form of currency based on mathematics alone. Insteadof fiat currency, which is printed, cryptocurrency is produced bysolving mathematical problems based on cryptography.

Cryptography: The use of mathematics to create codes and ciphers thatcan be used to conceal information. Used as the basis for themathematical problems used to verify and secure bitcoin transactions.

CSRNG: Acronym for “Cryptographically Secure Random Number Generator”,used in private key generation for bitcoin wallets.

Cyberclones: Created by corporations by fracking digital world for theirdata.

D

DAO: An acronym for “Decentralised Autonomous Organization”, atheoretical company that could exist in the cloud and carry out businessaccording to preset algorithms, needing no human management. Also knownas “DACs”.

Darksend: Darksend is Darkcoin's decentralized mixing implementation,which was designed to give users of Darkcoin greater transactionalprivacy/anonymity.

DDoS: A distributed denial of service attack uses large numbers ofcomputers under an attacker's control to drain the resources of acentral target. They often send small amounts of network traffic acrossthe Internet to tie up computing and bandwidth resources at the target,which prevents it from providing services to legitimate users. Bitcoinexchanges have sometimes been hit with DDoS attacks.

Deepweb: The content online not indexed by search engines making itdifficult to access. The majority of content on the Internet resides onthe deepweb and can be accessed using a program called TOR.

Demurrage: Certain currencies penalize users for hoarding, this is donevia demurrage, where a fee is charged for holding unspent coins. Thisfee increases as time passes.

Denial of Service [DoS]: Is a form of attack on the network. Bitcoinnodes punish certain behavior of other nodes by banning their IPaddresses for 24 hours to avoid DoS. Also, some theoretical attacks like51% attack may be used for network-wide DoS.

Depth: Depth refers to a place in the blockchain. A transaction with 6confirmations can also be called “6 blocks deep”.

Desktop Wallet: A wallet that stores the private keys on your computer,which allow the spending and management of your bitcoins.

Deterministic Wallet: A wallet based on a system of deriving multiplekeys from a single starting point known as a seed. This seed is all thatis needed to restore a wallet if it is lost and can allow the creationof public addresses without the knowledge of the private key.

Difficulty: This number determines how difficult it is to hash a newblock. It is related to the maximum allowed number in a given numericalportion of a transaction block's hash. The lower the number, the moredifficult it is to produce a hash value that fits it. Difficulty variesbased on the amount of computing power used by miners on the bitcoinnetwork. If large numbers of miners leave a network, the difficultywould decrease.

Digital Certificate: Pieces of code that protect messages without theencrypt-decrypt operations but users must apply (and pay an annual fee)for individual certificates and most common e-mail services do notsupport them (Google, Outlook, Yahoo).

Digital Commodity: A digital commodity is a scarce, electronicallytransferrable, intangible, with a market value.

Digital Identity: A digital identity is an online or networked identityadopted or claimed in cyberspace by an individual, organization orelectronic device.

Distributed Autonomous Enterprise [DAE]: Requires little or notraditional management or hierarchy to generate customer value and ownerwealth.

Distributed Application [DAPP]: A set of smart contracts that storesdata on a home-listings blockchain.

Distributed Capitalism: Lowering barriers to participation.

Distributed Ledger: Distributed ledgers are a type of database that arespread across multiple sites, countries or institutions. Records arestored one after the other in a continuous ledger. Distributed ledgerdata can be either “permissioned” or “unpermissioned” to control who canview it.

Double Spending: The act of spending bitcoins twice. It happens whensomeone makes a transaction using bitcoins, and then makes a secondpurchase from someone else, using the same bitcoins. They then convincethe rest of the network to confirm only one of the transactions byhashing it in a block. Double spending is not easy to do, thanks to theway that the bitcoin network operates, but it is nevertheless a risk runby those accepting zero-confirmation transactions.

Dust: A transaction output that is smaller than a typically fee requiredto spend it [sic]. This is not a strict part of the protocol, as anyamount more than zero is valid. BitcoinQT refuses to mine or relay“dust” transactions to avoid uselessly increasing the size of unspenttransaction outputs (UTXO) index.

Dust Transaction: A transaction for an extremely small amount ofbitcoins, which offers little financial value, but takes up space in theblockchain. The bitcoin developer team has taken efforts to eliminatedust transactions by increasing the minimum transaction amount that willbe relayed by the network.

E

ECDSA: The Elliptic Curve Digital Signature Algorithm is the lightweightcryptographic algorithm used to sign transactions in the Bitcoinprotocol.

Elliptic Curve Arithmetic: A set of mathematical operations defined on agroup of points on a 2D elliptic curve. Bitcoin protocol uses predefinedcurve secp256k1. Here is the simplest possible explanation of theoperations: you can add and subtract points and multiply them by aninteger. Dividing by an integer is computationally infeasible (otherwisecryptographic signatures will not work). The private is a 256-bitinteger and the public key is a product of a predefined point G(“generator”) by that integer: a. Associativity law allows implementinginteresting cryptographic schemes like Diffie-Hellman key exchange(ECDH): two parties with private keys a and b may exchange their publickeys A and B to compute a shared secret point C:C+A*b=B* abecause(G*a)*==(G*b)*a. The this point C can be used as a AES encryptionkey to protect their communication channel.

‘Entertainment’: states, displays, user experience, stimuli (light,sound, tactile), Title/Value Transfer, game

Escrow: The act of holding funds or assets in a third-party account toprotect them during an asynchronous transaction.

ETF: Acronym for “Exchange Traded Fund”. These are investment fundstraded on stock markets that track the price index of an underlyingasset.

Ethereum Browser: (aka Ethereum Reference Client) A cross-platform GUIof an interface similar to a simplified browser (a 1a Chrome) that isable to host sandboxed applications whose backend is purely on theEthereum protocol.

Ethereum Runtime Environment: (aka ERE) The environment which isprovided to an Autonomous Object executing in the EVM. Includes the EVMbut also the structure of the world state on which the EVM relies forcertain I/O instructions including CALL & CREATE.

Ethereum Virtual Machine: (aka EVM) The virtual machine that forms thekey part of the execution model for an Account's associated EVM Code.

EVM Assembly: The human-readable form of EVM code.

EVM Code: The bytecode that the EVM can natively execute. Used toformally specify the meaning and ramifications of a message to anAccount.

Exchange: A central resource for exchanging different forms of money andother assets. Bitcoin exchanges are typically used to exchange thecryptocurrency for other, typically fiat, currencies.

External Actor: A person or other entity able to interface to anEthereum node, but external to the world of Ethereum. It can interactwith Ethereum through depositing signed Transactions and inspecting theblockchain and associated state. Has one (or more) intrinsic Accounts.

Extra Nonce: A number placed in coinbase script and incremented by aminer each time the nonce 32-bit integer overflows. This is not therequired way to continue mining when nonce overflows, one can alsochange the merkle tree of transactions or change a public key used forcollecting a block reward.

F

Faucet: A technique used when first launching an altcoin. A set numberof coins are pre-mined, and given away for free, to encourage people totake interest in the coin and begin mining it themselves.

Fiat Currency: A currency, conjured out of thin air, which only hasvalue because people say it does. Constantly under close scrutiny byregulators due to its known application in money laundering andterrorist activities. Not to be confused with bitcoin.

Fill or Kill: This is a simple type of buy order made with acryptocurrency exchange. The investor dictates how much currency theywant, and at what price, and establishes a cutoff date for the order.The exchange will then do their best to fill the order according tothose criteria. If the exchange hasn't found an appropriate match forthe order by the cutoff date, the order is canceled and left unfilled.In other words, fill this order according to these guidelines and withinthis time frame. If you can't, kill it

FinCEN: The Financial Crimes Enforcement Network, an agency within theUS Treasury Department. FinCEN has thus far been the main organizationto impose regulations on exchanges trading in bitcoin.

Fork: The creation of an alternative ongoing version of the blockchain,typically because one set of miners begins hashing a different set oftransaction blocks from another. It can be caused maliciously, by agroup of miners gaining too much control over the network (see 51%attack), accidentally, thanks to a bug in the system, or intentionally,when a core development team decides to introduce substantial newfeatures into a new version of a client. A fork is successful if itbecomes the longest version of the blockchain, as defined by difficulty.

FPGA: A Field Programmable Gate Array is a processing chip that can beconfigured with custom functions after it has been fabricated. Think ofit as a blank silicon slate on which instructions can be written.Because FPGAs can be produced en masse and configured after fabrication,manufacturers benefit from economies of scale, making them cheaper thanASIC chips.

Freicoin: A cryptocurrency based on the inflation-free principlesoutlined by the economist Silvio Gessell.

Frictionless: In reference to payment systems, a system is“frictionless” when there are zero transaction costs or restraints ontrading.

Full Node: A node which implements all of bitcoin protocol and does notrequire trusting any external service to validate transactions. It isable to download and validate the entire blockchain. All full nodesimplement the same peer-to-peer messaging protocol to exchangetransactions and blocks, but that is not a requirement. A full node mayreceive and validate data using any protocol and from any source.However, the highest security is achieved by being able to communicateas fast as possible with as many nodes as possible.

G

Gas: The fundamental network cost unit. Paid for exclusively by Ether(as of PoC-4), which is converted freely to and from Gas as required.Gas does not exist outside of the internal Ethereum computation engine;its price is set by the Transaction and miners are free to ignoreTransactions whose Gas price is too low.

Genesis Block The very first block in the block chain.

Gigahashes/sec: The number of hashing attempts possible in a givensecond, measured in billions of hashes (thousands of Megahashes).

GPU: Graphical Processing Unit. A silicon chip specifically designed forthe complex mathematical calculations needed to render millions ofpolygons in modern computer game graphics. They are also well suited tothe cryptographic calculations needed in cryptocurrency mining.

Graph Gaps: On occasion, gaps will appear in trend lines on market valuegraphs. These gaps indicate a visible drop or rise in a commodity'svalue that hasn't necessarily happened due to trading. These can be theresult of closed markets, statistical adjustments by analysts, or bystrong news about the commodity. There are three types of gaps:

1. Breakaway Gap. These appear at the beginning of a strong upward ordownward trend, and represent very high-volume trading.

2. Runaway Gap. These occur during an upward or downward trend, andrepresent a quick momentary intensification of that trend.

3. Exhaustion Gap. This occurs toward the end of an upward or downwardtrend, and tends to indicate a small trend in the opposite direction

H

Halving: Bitcoins have a finite supply, which makes them a scarcedigital commodity. The total amount of bitcoins that will ever be issuedis 21 million. The number of bitcoins generated per block is decreased50% every four years. The final halving will take place in the year2140.

Hard Fork: Some people use term hard fork to stress that changingBitcoin protocol requires overwhelming majority to agree with it, orsome noticeable part of the economy will continue with originalblockchain following the old rules.

Hardware Wallet: A bitcoin wallet which stores users bitcoins offline onhardware devices

Hash: A mathematical process that takes a variable amount of data andproduces a shorter, fixed-length output. A hashing function has twoimportant characteristics. Firstly, it is mathematically difficult towork out what the original input was by looking at the output. Secondly,changing even the tiniest part of the input will produce an entirelydifferent output.

to HASH: To compute a hash function of some data. If hash function isnot mentioned explicitly, it is the one defined by the context. Forinstance, “to hash a transaction” means to compute Hash256 of binaryrepresentation of a transaction.

Hash160: SHA-256 hashed with RIPEMD-160 it is used to produce an addressbecause it makes a smaller hash (20 bytes vs. 32 bytes) than SHA-256,but still uses SHA-256 internally for security. BTCHash1600 inCoreBitcoin. Hash1600 in BitcoinQT. It is also available in scripts asOP_HASH160.

Hash, Hash256: When not speaking about arbitrary hash functions, Hashrefers to two rounds of SHA-256. That is, you should compute a SHA-256hash of your data and then another SHA-256 hash of that hash. It is usedin block header hashing, transaction hashing, making a merkle tree oftransactions, or computing a checksum of an address. KnownasBTCHash2560( ) in CoreBitcoin, Hash( )in BitcoinQT. It is alsoavailable in scripts as OP_HASH256.

Hash Function: A hash function takes an arbitrary input such as a stringof integers (a key) and outputs a value of a pre-specified length (ahash). Bitcoin uses a cryptographic hash function to secure the network.

Hash Rate: The number of hashes that can be performed by a bitcoin minerin a given period of time (usually a second).

Hash Type (hashtype): A single byte appended to a transaction signaturein the transaction input which describes how the transaction should behashed in order to verify that signature. There are three typesaffecting outputs: ALL (default), SINGLE, NONE and one optional modifierANYONECANPAY affecting the inputs (can be combined with either of thefirst three). ALL requires all outputs to be hashed (thus, all outputsare signed). SINGLE clears all output scripts but the one with the sameindex as the input in question. NONE clears all outputs thus allowingchanging them at will. ANYONECANPAY removes all inputs except thecurrent one (allows anyone to contribute independently.) The actualbehavior is more subtle than this overview, you should check the actualsource code for more comments.

Height: See Block Height

Hot Wallet: A bitcoin wallet that has an active connection to theInternet. These are used for “everyday” transactions and should neverhold large amounts of bitcoin, since their connectivity reduces theirsecurity.

HTML: Acronym for “HyperText Markup Language”, the language in whichwebpages are written.

HTTP: Acronym for “HyperText Transfer Protocol”, this is the underlyingprotocol for the world wide web.

Hybrid Wallet: This is a cryptocurrency storage and maintenance systemthat is a combination of a software wallet (stored on a local computer)and a web wallet (stored on a third-party server). The bulk of yourdigital currency account information is stored on the wallet host'sserver—except for one important detail. Your private key (the code thatuniquely identifies you) is stored only on your own device. When youmake a transaction, your private key is encrypted on the way to theexchange's server, so they never know what your private key is. Accessto your private key also includes a password that again only the userknows. If the user loses or forgets that password, access to the accountcould be denied, and the user could potentially lose the account balanceforever.

I

Industrial Blockchain: Secure transactional capability to watches andother wearable devices.

Input: The part of a bitcoin transaction denoting where the bitcoinpayment has come from. Typically, this will be a bitcoin address, unlessthe transaction is a generation transaction, meaning that the bitcoinhas been freshly mined (see Coinbase).

Interface System and methods by which two or more computers talk to eachother over a network, such as the Internet, using a common language thatthey both understand.

K

Key: Could mean an ECDSA public or private key, or AES symmetricencryption key. AES is not used in the protocol itself (only to encryptthe ECDSA keys and other sensitive data), so usually the word key meansan ECDSA key. When talking about keys, people usually mean private keysas public key can always be derived from a private one. See Private Keyand Public Key.

Key Pool: Some wallet applications that create new private keys randomlykeep a pool of unused pre-generated keys (BitcoinQT keeps 100 keys bydefault). When a new key is needed for change address or a new paymentrequest, the application provides the oldest key from the pool andreplaces it with a fresh one. The purpose of the pool is to ensure thatrecently used keys are always already back up on external storage.Without a key pool you could create a new key, receive a payment on itsaddress and then have your hard disk died before backing up this key. Akey pool guarantees that this key was already backed up several daysbefore being used. Deterministic wallets do not use a key pool becausethey need to back up a single secret key.

Kilohashes/sec: The number of hashing attempts possible in a givensecond, measured in thousands of hashes.

Kimoto Gravity Well: A mining difficult readjustment algorithm, whichwas created in 2013 for Megacoin, an altcoin. The well allows difficultyreadjustment to occur every block, instead of every 2016 blocks forBitcoin. This was done as a response to concern about multi pool miningschemes.

KYC: Know Your Client/Customer rules force financial institutions to vetthe people they are doing business with, ensuring that they arelegitimate.

L

Laundry: Also known as a “mixing service”, they combine funds fromvarious users and redistribute them, making tracing the bitcoins back totheir original source very difficult by mixing their “taint”.

Ledger: An append-only record store, where records are immutable and mayhold more general information than financial records.

Ledger of Everything: Blockchain can address the six obstacles to afunctioning Internet of Things features: resilient, robust, real-time,responsive, radically open, renewable, redactive, revenue-generating,reliable.

Leverage: In foreign currency trading, leverage multiplies the realfunds in your account by a given factor, enabling you to make tradesthat result in significant profit. By giving leverage to a trader, thetrading exchange is effectively lending them money, in the hope that itwill earn back more than it loaned in commission. Leverage is also knownas a margin requirement.

Lightweight Client: Comparing to full node, lightweight node does notstore the whole blockchain and thus cannot fully verify any transaction.There are two kinds of lightweight nodes: those fully trusting anexternal service to determine wallet balance and validity oftransactions (e.g. blockchain.info) and the apps implementing SimplifiedPayment Verification (SPV). SPV clients do not need to trust anyparticular service, but are more vulnerable to 51% attack than fullnodes. See Simplified Payment Verification.

Litecoin: An altcoin based on the Scrypt proof of work.

Liquidity: The ability to buy and sell an asset easily, with pricingthat stays roughly similar between trades. A suitably large community ofbuyers and sellers is important for liquidity. The result of an illiquidmarket is price volatility, and the inability to easily determine thevalue of an asset.

Liquidity Swap: As a financial instrument on cryptocurrency exchanges,liquidity swaps are contracts where investors offer loans to others totrade with in exchange for a set return.

LLL: The Lisp-like Low-level Language, a human-writable language usedfor authoring simple contracts and general low-level language toolkitfor trans-compiling to.

Lock Time (locktime): A 32-bit field in a transaction that means eithera block height at which the transaction becomes valid, or a UNIXtimestamp. Zero means transaction is valid in any block. A number lessthan 500000000 is interpreted as a block number (the limit will be hitafter year 11000), otherwise a timestamp.

Lottery: Defined by many states as prize, chance & consideration

M

MAC Media Access Control.

Main Chain: A part of the blockchain which a node considers the mostdifficult (see difficulty). All nodes store all valid blocks, includingorphans and recompute the total difficulty when receiving another block.If the newly arrived block or blocks do not extend existing main chain,but create another one from some previous block, it is calledreorganization.

Mainnet: Main Bitcoin network and its blockchain. The term is mostlyused in comparison to testnet.

mBTC: 1 thousandth of a bitcoin (0.001 BTC).

Megahashes/sec: The number of hashing attempts possible in a givensecond, measured in millions of hashes (thousands of Kilohashes).

Mempool: A technical term for a collection of unconfirmed transactionsstored by a node until they either expire or get included in the mainchain. When reorganization happens, transactions from orphaned blockseither become invalid (if already included in the main chain) or movedto a pool of unconfirmed transactions. By default, bitcoind nodes throwaway unconfirmed transactions after 24 hours.

Merged Mining: This allows a miner to work on multiple blockchainssimultaneously, contributing to the hash rate (and thus security) ofboth currencies being mined. E.g. Namecoin has implemented merged miningwith Bitcoin.

Merkle Tree: Merkle tree is an abstract data structure that organizes alist of data items in a tree of their hashes (like in Git, Mercurial orZFS). In Bitcoin the merkle tree issued only to organize transactionswithin a block (the block header contains only one hash of a tree) sothat full nodes may prune fully spent transactions to save disk space.SPV clients store only block headers and validate transactions if theyare provided with a list of all intermediate hashes.

Message: Data (as a set of bytes) and Value (specified as Ether) that ispassed between two Accounts, either through the deterministic operationof an Autonomous Object or the cryptographically secure signature of theTransaction.

Message Call: The act of passing a message from one Account to another.If the destination account is associated with non-empty EVM Code, thenthe VM will be started with the state of said Object and the Messageacted upon. If the message sender is an Autonomous Object, then the Callpasses any data returned from the VM operation.

Microtransaction: Paying a tiny amount for an asset or service,primarily online. Micro-transactions are difficult to perform underconventional payment systems, because of the heavy commissions involved.It is difficult to pay two cents to read an online article using yourcredit card, for example.

Miner: A computer participating in any cryptocurrency network performingproof of work. This is usually done to receive block awards.

Mining: The act of generating new bitcoins by solving cryptographicproblems using computing hardware.

Mining Algorithm: The algorithm used by a cryptocurrency to signtransactions in the Bitcoin network, adding blocks onto the blockchain.

Mining Contract: A method of investing in bitcoin mining hardware,allowing anyone to rent out a pre-specified amount of hashing power, foran agreed amount of time. The mining service takes care of hardwaremaintenance, hosting and electricity costs, making it simpler forinvestors.

Mining Pool: A group of miners who have decided to combine theircomputing power for mining. This allows rewards to be distributed moreconsistently between participants in the pool.

Mint: Satoshi distributed the mint by linking the issuance of bitcoinsto the creation of a new block ledger, putting the power to mint intoall the hands of the peer network.

Mintage Cap: As cryptocurrency miners process blocks of transactiondata, they generate new coins as a result. Cryptocurrency is a youngindustry, and its issuers want enough coins to go around to satisfy newinvestors as they join. These new coins are mathematically designed tobe turned out at a stable rate, so the value of the currency will remainrelatively stable, too (there will be fluctuations, as in any othercommodity market, but not as wild as they would be if the commodity wasextremely limited in availability). Over time, however, the mathematicsof coin creation are also designed to end, to avoid over-saturation ofthe market and currency devaluation.

Minting: the process of rewarding users in proof of stake coins. Newcoins are minted as the reward for verifying transactions in a block.

Mixing: A process of exchanging coins with other persons in order toincrease privacy of one's history. Sometimes it is associated with moneylaundering, but strictly speaking it is orthogonal to laundering. Intraditional banking, a bank protects customer's privacy by hidingtransactions from all 3^(rd) parties. In Bitcoin any merchant may do astatistical analysis of one's entire payment history and determine, forinstance, how many bitcoins one owns. While it is still possible toimplement KYC (Know Your Customer) rules on a level of every merchant,mixing allows to be separate information about one's history between themerchants. Most important use cases for mixing are: 1) receiving asalary as a single bit monthly payment and then spending it in smalltransactions (“café sees thousands of dollars when you pay just $4”); 2)making a single payment and revealing connection of many small privatespendings (“car dealer sees how much you are addicted to the coffee”).In both cases your employer, a café and a car dealer may comply withKYC/AML laws and report your identity and transferred amounts, butneither of them need to know about each other. Mixing bitcoins afterreceiving a salary and mixing them before making a big payment solvesthis privacy problem.

Mixing Service: Service that mixes your bitcoins with someone else's,sending you back bitcoins with different inputs and outputs from theones that you sent to it. A mixing service (also known as a tumbler)preserves your privacy because it stops people tracing a particularbitcoin to you. It also has the potential to be used for moneylaundering.

Mobile Wallet: A wallet which runs a “Mobile client”, allowing people tohave bitcoin wallets on their phones and tablet computers and pay on thego.

Monetary Policy: Another breakthrough is to preserve value programmedinto the software.

Money Laundering: The act of trying to “clean” money earned fromcriminal activity by converting these profits to what appear to belegitimate assets.

M-of-N Multi-signature Transaction: A transaction that can be spentusing M signatures when N public keys are required (M is less or equalto N). Multi-signature transactions that only contain oneOP_CHECKMULTSIG opcode and N is 3, 2 or 1 are considered standard.

Multisig: Multi-signature addresses allow multiple parties to partiallyseed an address with a public key. When someone wants to spend some ofthe bitcoins, they need some of these people to sign their transactionin addition to themselves. The needed number of signatures is agreed atthe start when people create the address. Services using multi-signatureaddresses have a much greater resistance to theft.

N

Namecoin: An altcoin designed to provide an alternative to thetraditional domain name system (DNS). Users can register .bit domains,accessible via proxy servers, by paying with namecoins.

Network Effect: The increase in value of a good or service that occurswhen its use becomes more widespread.

NFC: Acronym for “Near Field Communication”, a low power, short rangemethod of wireless communication. This can be used to build upon RFIDsystems and is what contactless smart cards (oyster cards) and paymentsystems (paypass) use. Most recently implement in the Apple Pay app.

Node: A computer connected to the bitcoin network using a client thatrelays transactions to others (see client).

Nonce: A random string of data used as an input when hashing atransaction block. A nonce is used to try and produce a digest that fitsthe numerical parameters set by the bitcoin difficulty. A differentnonce will be used with each hashing attempt, meaning that billions ofnonces are generated when attempting to hash each transaction block.

Non-standard Transaction: Any valid transaction that is not standard.Non-standard transactions are not relayed or mined by default BitcoinQTnodes (but are relayed and mined on testnet). However, if anyone putssuch transaction in a block, it will be accepted by all nodes. Inpractice it means that unusual transactions will take more time to getincluded in the blockchain. If some kind of non-standard transactionsbecomes useful and popular, it may get named standard and adopted byusers (like it). See Standard Transaction.

Novacoin: Though this type of cryptocurrency is not yet near the valueor overall investor numbers of the big players in the industry, Novacoinstill holds a spot in the top five; not bad, considering it wasintroduced in February 2013. Novacoin uses the Scrypt mining algorithm,and is mined by the combined proof-of-work and proof-of-stake methods.

O

Object: Synonym for Autonomous Object.

Off Blockchain Transactions: Exchanges of value which occur off theblockchain between trusted parties. These occur because they are quickerand do not block the blockchain.

Off-Ledger Currency: A currency minted off-ledger and used on-ledger. Anexample of this would be using distributed ledgers to manage a nationalcurrency.

On-Ledger Currency: A currency minted on-ledger and used on-ledger. Anexample of this would be cryptocurrency.

Opcode: 8-bit code of script operation. Codes from 0x01 to 0x4B (decimal75) are interpreted as a length of data to be pushed on the stack of theinterpreter (data bytes follow the opcode). Other codes are either dosomething interesting, or disabled and cause transaction verification tofail, or do nothing (reserved for future use).

Open Network Enterprises: As smart contracts grow in complexity andinteroperate with other contracts then contribute to this.

Open Source: The practice of sharing the source code for a piece ofcomputer software, allowing it to be distributed and altered by anyone.

Orphan Block: A block which is not a part of the valid blockchain, butwhich was instead part of a fork that was discarded.

OTC Exchange: An exchange in which traders make deals with each otherdirectly, rather than relying on a central exchange to mediate betweenthem.

Output: The destination address for a bitcoin transaction. There can bemultiple outputs for a single transaction.

Owners of Coin: Ethereum chose this as its economic set. Ripple andStellar chose the social network.

Owners of the Computing Power: Satoshi chose this economic set. Thisrequires these miners to consume a resource external to the network,namely electricity, if they want to participate in the reward system.

P

Paper Wallet: A printed sheet containing one or more public bitcoinaddresses and their corresponding private keys. Often used to storebitcoins securely, instead of using software wallets, which can becorrupted, or web wallets, which can be hacked or simply disappear. Auseful form of cold bitcoin storage.

Participant: An actor who can access the ledger: read records or addrecords to.

Pay-to-Script Hash: A type of script and address that allows sendingbitcoins to arbitrary complex scripts using a compact hash of thatscript. This allows payer to pay much smaller transaction fees and notwait very long for a non-standard transaction to get included in theblockchain. Then the actual script matching the hash must be provided bythe payee when redeeming the funds. P2SH addresses are encoded in Base58Check just like regular public keys and start with number “3”.

Peer: An actor that shares responsibility for maintaining the identityand integrity of the ledger.

P2P: Peer-to-peer. Decentralized interactions that happen between atleast two parties in a highly interconnected network. An alternativesystem to a ‘hub-and-spoke’ arrangement, in which all participants in atransaction deal with each other through a single mediation point.

Permissioned Ledger: A permissioned ledger is a ledger where actors musthave permission to access the ledger. Permissioned ledgers may have oneor many owners. When a new record is added, the ledger's integrity ischecked by a limited consensus process. This is carried out by trustedactors—government departments or banks, for example—which makesmaintaining a shared record much simpler that the consensus process usedby unpermissioned ledgers. Permissioned block chains providehigh-verifiable data sets because the consensus process creates adigital signature, which can be seen by all parties. A permissionedledger is usually faster than an unpermissioned ledger.

Phone-to-Phone Transfer: This is a mobile application feature thatallows the instantaneous transfer of information from one smartphone toanother. If two mobile device users want to exchange data, and both havethis feature installed and activated on their phones, they can make thetransfer simply by having their devices in close proximity to eachother. These are also sometimes called “touch transfers.”

Platform Exchange: This is a digital currency exchange that limits therole they play in transactions made between investors. The majority ofexchanges are there to facilitate these transactions, and make themeasier to carry out. The exchange will sort through buy and sell orders,and will then match up investors who meet the criteria of the order inquestion. Their algorithms are designed so the trades being made areboth secure and fair to both parties involved. Beyond that, however, theexchange does not play any “middleman” or mediating role. This is incontrast to exchanges that will hold the transaction funds in escrow, orwill discuss the details of the trade with both investors before movingforward.

Pool: A collection of mining clients which collectively mine a block,and then split the reward between them. Mining pools are a useful way toincrease your probability of successfully mining a block as thedifficulty rises.

PPCoin: AKA Peercoin or P2P coin. An altcoin using the proof of stakemechanism in conjunction with proof of work. Based on a paper producedby Sunny King and Scott Nadal.

Pre-mining: The mining of coins by a cryptocurrency's founder beforethat coin has been announced and details released to others who may wishto mine the coin. Pre-mining is a common technique used with scamcoins,although not all pre-mined coins are scamcoins (see Scamcoin).

Primecoin: Developed by Sunny King, Primecoin uses a proof of worksystem to calculate prime numbers.

Private Key (PrivKey): An alphanumeric string kept secret by the user,and designed to sign a digital communication when hashed with a publickey. In the case of bitcoin, this string is a private key designed towork with a public key. The public key is a bitcoin address (see BitcoinAddress).

Process Node: The size of a transistor in nanometers, produced during achip fabrication process. Smaller process nodes are more efficient.

Proof of Activity: Combines proof of work and proof of stake.

Proof of Burn: This is a method of “burning” one Proof of Workcryptocurrency in order to receive a different cryptocurrency. This is aform of “bootstrapping” one cryptocurrency off another, and is done bysending coins to a verifiable unspendable address.

Proof of Capacity: Requires miners to allot a sizeable volume of theirhard drive to mining.

Proof of Existence: A service provided through the blockchain thatallows anyone to anonymously and securely store a proof of existence forany document they choose online. This allows people to prove that adocument existed at a certain point in time and demonstrate theirownership of it, without fear of that proof being taken from them.

Proof of Stake: An alternative to proof of work, in which your existingstake in a currency (the amount of that currency that you hold) is usedto calculate the amount of that currency that you can mine.

Proof of Storage: Requires miners to allocate and share disk space indistributed cloud.

Proof of Work: A system that ties mining capability to computationalpower. Blocks must be hashed, which is in itself an easy computationalprocess, but an additional variable is added to the hashing process tomake it more difficult. When a block is successfully hashed, the hashingmust have taken some time and computational effort. Thus, a hashed blockis considered proof of work.

Prosumers: Customers who produce.

Protocol Evolution: Blockchain is the result of the natural evolution ofinternet protocols. Wired explains the story of how the original 1974TCP/IP internet network protocol and Tim Berner-Lee's Hyper TextTransfer Protocol (HTTP) evolved in the same way as blockchain isevolving for the next generation of the Internet, bundling multipleprotocols together to form the foundation of future frameworks and“watching the birth of the internet all over again”.

PSP: Payment Service Provider. The PSP offers payment processingservices for merchants who wish to accept payments online.

P2SH: See Pay-to-Script Hash.

Public Key (Pubkey): An alphanumeric string which is publicly known, andwhich is hashed with another, privately held string to sign a digitalcommunication. In the case of bitcoin, the public key is a bitcoinaddress.

Q

QR Code: A two-dimensional graphical block containing a monochromaticpattern representing a sequence of data. QR or “Quick Response” codesare designed to be scanned by cameras, including those found in mobilephones, and are frequently used to encode bitcoin addresses.

R

Reference Implementation: Bitcoin QT (or bitcoind) is the most used fullnode implementation, so it is considered a reference for otherimplementations. If an alternative implementation is not compatible withBitcoinQT it may be forked, that is it will not see the same main chainas the rest of the network running BitcoinQT.

Relaying Transactions: Connected Bitcoin nodes relay new transactionsbetween each other on best effort basis in order to send them to themining nodes. Some transactions may not be relayed by all nodes. E.g.non-standard transactions, or transactions without a minimum fee.Bitcoin message protocol is not the only way to send the transaction.One may also send it directly to a miner, mine it yourself, or send itdirectly to the payee and make them to relay or mine it.

Remittance: A sum of money being sent, usually internationally, as apayment or gift.

Reorg, Reorganization: An event in the node when one or more blocks inthe main chain become orphaned. Usually, newly received blocks areextending existing main chain. Sometimes (4-6 times a week) a couple ofblocks of the same height are produced almost simultaneously and for ashort period of time some nodes may see one block as a tip of the mainchain which will be eventually replaced by a more difficult blocks(s).Each transaction in the orphaned blocks either becomes invalid (ifalready included in the main chain block) or becomes unconfirmed andmoved to the mempool. In case of a major bug or a 51% attack,reorganization may involve reorganizing more than one block.

Replicated Ledger: A ledger with one master (authoritative) copy of thedata, and many slave (non-authoritative) copies.

Reward: Amount of newly generated bitcoins that a miner may claim in anew block. The first transaction in the block allows miner to claimcurrently allowed reward as well as transaction fees from alltransactions fees from all transactions in the block. Reward is halvedever 210000 blocks approximately every 4 years. As of Jul. 27, 2014 thereward is 25 BTC (the first halving occurred in December 2012). Forsecurity reasons, rewards cannot be spent before 100 blocks built on topof the current book.

Ripple: A payment network that can be used to transfer any currency(including ad hoc currencies that have been created by users). Thenetwork consists of payment nodes and gateways operated by authorities.Payments are made using a series of IOUs, and the network is based ontrust relationships.

S

Satoshi: The smallest subdivision of a bitcoin currently available(0.00000001 BTC).

Satoshi Nakamoto: The name used by the original inventor of the Bitcoinprotocol, who withdrew from the project at the end of 2010.

Scamcoin: An altcoin produced with the sole purpose of making money forthe originator. Scamcoins frequently use pump and dump techniques andpre-mining together.

Script: A compact turing-incomplete programming language used intransaction inputs and outputs. Scripts are interpreted by a Forth-likestack machine: each operation manipulates data on the stack. Mostscripts follow the standard pattern and verify the digital signatureprovided in the transaction input against a public key provided in theprevious transaction's output. Both signatures and public keys areprovided using scripts. Scripts may contain complex conditions, but cannever change amounts being transferred. Amount is stored in a separatefield in a transaction output.

scriptPubKey: Original name in bitcoind for a transaction output script.Typically, output scripts contain public keys (or their hashes: seeAddress) that allow only owner of a corresponding private key to redeemthe bitcoins in the output.

scriptSig: Original name in bitcond for a transaction input script.Typically, input scripts contain signatures to prove ownership ofbitcoins sent by a previous transaction.

Scrypt: An alternative proof of work system to SHA-256, designed to beparticularly friendly to CPU and GPU miners, while offering littleadvantage to ASIC miners.

Secret Key: Either the Private Key or an encryption key is used inencrypted wallets. Bitcoin protocol does not use encryption anywhere, sosecret key typically means a private key used for signing transactions.

Sequence: A 32-bit unsigned integer in a transaction input used toreplace older version of a transaction by a newer one. Only used whenlocktime is not zero. Transaction is not considered valid until thesequence number is 0xFFFFFFFF.

Seed: The private key used in a “deterministic wallet”.

Self-Executing Contract: Also known as “smart contracts” these areprotocols that facilitate or enforce the obligations of contract withoutthe need for human intervention.

SEPA: The Single European Payments Area. A payment integration agreementwithin the European Union, designed to make it easier to transfer fundsbetween different banks and nations in euros.

SHA-256: The cryptographic function used as the basis for bitcoin'sproof of work system.

Sidechain: These are theoretical, independent blockchains which are “twoway pegged” to the Bitcoin blockchain. These can have their own uniquefeatures and can have bitcoins sent to and from them.

Signature: A digital digest produced by hashing private and public keystogether to prove that a bitcoin transaction came from a particularaddress.

Simplified Payment Verification (SPV): A scheme to validate transactionswithout storing the whole blockchain (only block headers) and withouttrusting any external service. Every transaction must be present withall its parent and sibling hashes in a merkle tree up to the root. SPVclient trusts the most difficult chain of block headers and can validateif the transaction indeed belongs to a certain block header. Since SPVdoes not validate all transactions, a 51% attack may not only cause adouble spend (like with full nodes), but also make a completely invalidpayment with bitcoins created from nowhere. However, this kind of attackis very costly and probably more expensive than a product in question.Bitcoinj library implements SPV functionally. (See SPV)

Smart Contracts: Smart contracts are contracts whose terms are recordedin a computer language instead of a legal language. Smart contracts canbe automatically executed by a computing system, such as a suitabledistributed ledger system.

Soft Fork: Sometimes the soft fork refers to an important change ofsoftware behavior that is not a hard fork (e.g. changing mining feepolicy). See Hard Fork and Fork.

Source Code: The open-source software which includes protocols governingrules for movement and ownership of bitcoins and the cryptography systemthat secures and verifies Bitcoin transactions.

Speculator: An individual who speculates on the price of bitcoin or anyother form of asset. Aiming to make profits by buying and selling atdifferent prices.

Spent Output: A transaction output can be spent only once: when anothervalid transaction makes a reference to this output from its own input.When another transaction attempts to spend the same output, it will berejected by the nodes already seeing the first transaction. Blockchainas a proof-of-work scheme allows every node to agree on whichtransaction was indeed the first one. The whole transaction isconsidered spent when all its outputs are spent.

Split: A split of a blockchain. See Fork.

SPV: Simplified Payment Verification. A feature of the Bitcoin protocolthat enables nodes to verify payments without downloading the fullblockchain. Instead, they need only download block headers.

Stale: When a bitcoin block is successfully hashed, any othersattempting to hash it may as well stop, because it is now ‘stale’. Theywould simply be repeating work that someone else has already done, forno reward. The term is also used in mining pools to describe a share ofa hashing job that has already been completed.

Stale Block: A block that has already been solved and thus cannot offerminers any reward for further work on it.

Standard Transaction: Some transactions are considered standard, meaningthey are relayed and mined by most nodes. More complex transactionscould be buggy or cause DoS attacks on the network, so they areconsidered non-standard and not relayed or mined by most nodes. Bothstandard and non-standard transactions are valid and once included inthe blockchain, will be recognized by all nodes. Standard transactionsare: 1) sending to a public key, 2) sending to an address, 3) sending toa P2SH address, 4) sending to a M-of-N multi-signature transaction whereN is 3 or less.

Storage State: The information particular to a given Account that ismaintained between the times that the Account's associated EVM Coderuns.

T

Taint: An analysis of how closely related two addresses are when theyhave both held a particular bitcoin. A taint analysis could be used todetermine how many steps it took for bitcoins to move from an addressknown for stolen coins, to the current address.

Target: A 256-bit number that puts an upper limit for a block headerhash to be valid. The lower the target is, the higher the difficult tofind a valid has. The maximum (easiest) target is0x00000000FFFF0000000000000000000000000000000000000000000000000000. Thedifficulty and the target are adjusted every 2016 blocks (approx. 2weeks) to keep interval between the blocks close to 10 minutes.

TCP/IP: Acronyms stand for “Transmission Control Protocol”/“InternetProtocol” and is the connection protocol used by the Internet.

Terahashes/sec: The number of hashing attempts possible in a givensecond, measured in trillions of hashes (thousands of Gigahashes).

Testnet: An alternative bitcoin blockchain, used purely for testingpurposes.

Testnet3: The latest version of testnet with another genesis block.

Timestamp: A proof that a piece of data existed at a certain point intime. For Bitcoin this is the cryptographic proof of when transactionshave taken place.

Tokenless Ledger: A tokenless ledger refers to a distributed ledger thatdoesn't require a native currency to operate.

TOR: An anonymous routing protocol, used by people wanting to hide theiridentity online.

Total Coin Supply: For many cryptocurrencies, there is a limit on thetotal number of coins that will ever come into existence, bitcoin'stotal supply is capped at 21 million coins.

Transaction: A piece of data, signed by an External Actor. It representseither a Message or a new Autonomous Object. Transactions are recordedinto each block of the blockchain.

Transaction Block: A collection of transactions on the bitcoin network,gathered into a block that can then be hashed and added to theblockchain.

Transaction Database: From a purely technological perspective,blockchains are transaction databases. The hashes, keys and nodes allmake up a distributed database that eschews centralized storage

Transaction Fee: A small fee imposed on some transactions sent acrossthe bitcoin network. The transaction fee is awarded to the miner thatsuccessfully hashes the block containing the relevant transaction.

Transaction Input: A part of a transaction that contains a reference toa previous transaction's output and a script that can prove ownership ofthat output. The script usually contains a signature and thus calledscriptSig. Inputs spend previous outputs completely. So if one needs topay only a portion of some previous output, the transaction shouldinclude extra change output that sends the remaining portion back to itsowner (on the same or different address). Coinbase transactions containonly one input with a zeroed reference to a previous transaction and anarbitrary data in place of script.

Transaction Output: An output contains an amount to be sent and a scriptthat allows further spending. The script typically contains a public key(or an address, a hash of a public key) and a signature verificationopcode. Only an owner of a corresponding private key is able to createanother transaction that sends that amount further to someone else. Inevery transaction, the sum of output amounts must be equal or less thana sum of all input amounts. See Change.

TX: see Transaction.

Txin: see Transaction Input.

Txout: see Transaction Output.

U

Ubiquity: Blockchains are everywhere; at this point in the alphabet thatis not news. The open-source code, universally applicable architectureof blockchains, and their ability to distribute, anonymize, protect, andkeep a perfectly accurate record of web transactions makes thetechnology a given.

Ubtc: One microbitcoin (0.000001 BTC).

Unconfirmed Transaction: Transaction that is not included in any block.Also known as “0-confirmation” transaction. Unconfirmed transactions arerelayed by the nodes and stay in the mempools. Unconfirmed transactionstays in the pool until the node decides to throw it away, finds it inthe blockchain, or includes it in the blockchain, or includes it in theblockchain itself (if it is a miner). See Confirmation Number.

Unique Node List: Other blockchains such as Ripple and Stellar rely onsocial networks for consensus and may recommend new participants (i.e.,new nodes) to generate unique mode list.

Unpermissioned Ledgers: Unpermissioned ledgers such as Bitcoin have nosingle owner—indeed, they cannot be owned. The purpose of anunpermissioned ledger is to allow anyone to contribute data to theledger and for everyone in possession of the ledger to have identicalcopies. This creates resistance which means that no actor can prevent atransaction from being added to the ledger. Participants maintain theintegrity of the ledger by reaching a consensus about its state.

UTXO Set: A collection of Unspent Transaction Outputs. Typically used indiscussions on optimizing an ever-growing index of transaction outputsthat are not yet spent. The index is important to efficiently validatenewly created transactions. Even if the rate of the new transactionsremains constant, the time required to locate and verify unspent outputgrows. Possible technical solutions include more efficient indexingalgorithms and a more performant hardware. BitcoinQT, for example, keepsonly an index of outputs matching user's keys and scans the entireblockchain when validating other transactions. A developer of one webwallet service mentioned that they maintain the entire index of UTXO andits size was around 100 Gb when the blockchain itself was only Gb. Somepeople seek social methods to solve the problem. For instance, byrefusing to relay or mine transactions that are considered dust(containing outputs smaller than a transaction fee required tomine/relay them).

V

Vanity Address: A bitcoin address with a desirable pattern, such as aname.

Varint: This term may cause confusion as it means different formats indifferent Bitcoin implementations. See CompactSize.

Velocity of Money: The velocity of money is an indicator of how quicklymoney received is then spent again. For bitcoin, we use “bitcoin daysdestroyed” to measure its velocity, this can indicate whether people arehoarding or spending their bitcoins.

Verification: Blockchains would not work as ledgers withoutverification. Much of this falls on miners, whose block creationsoftware verifies hashes of transactions when bundling them into blocks.In cryptocurrency and banking scenarios, payment verification is alsoparamount. This verification happens through node communication in thedistributed network, cross-checking a Bitcoin transaction against eachnode's blockchain data before sending it through.

Virgin Bitcoin: Bitcoins purchased as a reward for mining a block. Thesehave not yet been spent anywhere.

Volatility: The measurement of price movements over time for a tradedfinancial asset (including bitcoin).

W

Wallet: A method of storing bitcoins for later use. A wallet holds theprivate keys associated with bitcoin addresses. The blockchain is therecord of the bitcoin amounts associated with those addresses.

Wallet: Just like a bill-and-coin wallet, this is a place to keep yourdigital currency. There are four types of cryptocurrency wallets:

1. Software Wallet. These are programs you load onto your desktop orlaptop computer.

2. Mobile Wallet: These come in the form of applications you install onyour smartphone or tablet computer. They usually include QR codescanning and phone-to-phone transfers for on-the-go transactions.

3. Web Wallet: These are usually gotten through exchanges, and stored onthird-party servers via cloud computing. They can be accessed by anycomputing device.

4. Paper Wallet: Your digital currency can be printed out, usually inthe form of QR codes, and these hard-copy cryptocurrency “bills” can bekept in a physical wallet just like traditional money.

Wire Transfer: Electronically transferring money from one person toanother. Commonly used to send and retrieve fiat currency from bitcoinexchanges.

X

XBT: Informal currency code for 1 Bitcoin (defined as 100 000 000Satoshis). Some people proposed using it for 0.01 Bitcoin to avoidconfusion with BTC. There were rumors that Bloomberg tests XBT as aticker for 1 Bitcoin, but currently there is only ticker XBTFUND forSecondMarket's Bitcoin Investment Trust. See BTC.

XRP: Also known as Ripple, XRP is a global payments network built onblockchain that is marketed at international banks. XRP itself is thenative currency organizations can use to represent flat currency,cryptocurrency, commodities, or any other unit of value. Ripple is oneof the oldest examples of open payment protocols using blockchain, butthere is a laundry list of companies with different APIs, platforms anddistributed payments networks. Deloitte's Banking Industry Outlookrecently released a report estimating that blockchain-based paymentsystems could equal the volume of the United States' Automated ClearingHouse (ACH) financial transactions network by 2020.

Z

Zerocoin: A protocol designed to make cryptocurrency transactions trulyanonymous.

Zero-confirmation Transaction: A transaction in which the merchant ishappy to provide a product or service before the bitcoin's transmissionhas been confirmed by a miner and added to the blockchain. It can carrya risk of double spending.

Zero-confirmation Transaction: The processing of data for cryptocurrencytransactions can take anywhere from half a minute upward to over tenminutes in some cases. Though this is necessary in order to validatetransactions, and guards against fraudulent activity such as doublespending, the waiting period can be inconvenient for those involved inthe transactions. As a result, some exchanges and businesses that dealwith digital currency are offering “zero confirmation” transactions,which are almost immediately verified without waiting for the miningprocess to confirm the data block. Double spending, the practice inwhich a coin holder applies the same currency to two differenttransactions is a concern with zero confirmation transactions. Sincecryptocurrency is not “attached” to the person spending it in any way,by the time their double spending is discovered through the miningprocess, they are long gone and untraceable. With the demand for zeroconfirmation transactions on the upswing, entrepreneurs in thecryptocurrency industry are looking at ways to instantly verify, ordeny, transactions without having to wait for mining to take place. Inthe meantime, many businesses levy fees to offset the financial risk ofzero confirmation transactions, and yet others are refusing to acceptthem until the technology catches up.

Z System: IBM is openly committed to advancing blockchain technology onmany fronts, but the company has even gone as far as offering aBlockchain-as-a-Service (BaaS) platform for developers on the IBM Cloud,and integrating blockchain-based apps (created through the HyperledgerProject) on IBM z Systems. IBM even plans to leverage blockchainscombined with Watson on the Watson IoT platform to make it possible forinformation from devices such as RFID-based locations, barcode-scanevent, or device-reported data to be used with IBM's Blockchain and syncwith distributed ledgers and smart contracts.

What is claim:
 1. A system for control of an entertainment state systemhaving segregated secure functions in a secure entity unit for use bysecure users who are secure entities of the system and public functionsin a public interface portal for use by one or more public users who arepublic entities of the system, comprising: the public interface portaladapted to receive instructions regarding operation of the entertainmentstate system from the one or more public users, the public interfaceportal including: a first interface to receive instructions from andcommunicate to the one or more public users, a processor, a graphicaluser interface (GUI) coupled to the processor, a control unit inoperative communication with the processor and graphical user interface,and a second interface providing an application program interface (API)adapted to send one or more call requests to the secure entity unit andreceive one or more responses from the secure entity unit, and thesecure entity unit being segregated from the public interface portal,the secure entity unit being accessible only to the secure users of thesystem, the secure entity unit including: a receive interface, thereceive interface adapted to receive the one or more call requests fromthe application program interface (API) of the public interface portal,the receive interface including verification of the call request of asecure user, a send interface, the send interface adapted to provide theone or more responses from the secure entity unit to the publicinterface portal, a game engine, the game engine including an outcomedetermination unit, a financial engine, the financial engine beingcoupled to the game engine, an adaptive control unit, a responsiblegaming control unit, and an interface coupled to the secure entity unit,the secure entity unit performing functions related to providingfinancial information and outcome determination from the game engine. 2.The system for the control of an entertainment state system of claim 1wherein the secure entity unit further includes memory to store usersecure information.
 3. The system for the control of an entertainmentstate system of claim 1 wherein the financial information is taxinformation.
 4. The system for the control of an entertainment statesystem of claim 1 wherein the financial information couples to afinancial institution.
 5. The system for the control of an entertainmentstate system of claim 1 wherein the game engine includes a random numbergenerator (RNG).
 6. The system for the control of an entertainment statesystem of claim 1 wherein the secure entity unit further includes aregulatory and compliance unit.
 7. The system for the control of anentertainment state system of claim 1 wherein the adaptive control unitincludes cognitive computing unit.
 8. The system for the control of anentertainment state system of claim 1 wherein the adaptive control unitincludes an artificial intelligence unit.
 9. The system for the controlof an entertainment state system of claim 1 wherein the adaptive controlunit includes a machine-learning unit.
 10. The system for the control ofan entertainment state system of claim 1 wherein the adaptive controlunit includes a neural network.
 11. The system for the control of anentertainment state system of claim 10 wherein the neural network is adeep neural network.
 12. The system for the control of an entertainmentstate system of claim 10 wherein the neural network includes a graphicsprocessing unit (GPU).
 13. The system for the control of anentertainment state system of claim 10 wherein the neural network istrained utilizing user response data.
 14. The system for the control ofan entertainment state system of claim 10 wherein the neural network isa vectorized neural network.
 15. The system for the control of anentertainment state system of claim 10 wherein the neural network is arecurrent neural network.
 16. The system for the control of anentertainment state system of claim 1 wherein the secure entity unitincludes an analytics unit.
 17. The system for the control of anentertainment state system of claim 1 wherein the secure entity unitincludes a rate limit unit.